The US dollar is going through a rough patch, experiencing its worst first half-year since 1973. A 10.8% decline against a basket of currencies fuels safe-haven concerns, largely attributed to Donald Trump’s tariffs and predictions that his “big beautiful” budget bill will significantly increase national debt.
The euro has gained 5% against the struggling dollar, as noted by Unicredit. Rising expectations of US interest rate cuts, pushed by Trump’s critiques of the Federal Reserve, have further hurt the dollar. Despite this, the S&P 500 of US stocks remarkably rebounded to a record high by the end of June, suggesting that while the currency faces headwinds, other segments of the market are finding strength, particularly in technology and AI, and the anticipation of policy adjustments.