US Dollar Index Posts Worst First Half Performance Since 1973
The US dollar index (DXY) has hit its worst first half of the year performance since 1973 after losing about 11% due to forex traders selloff spree. The U.S. dollar index, which tracks the dollar against a basket of six global currencies, was 0.4% lower on the session at 96.38.
The plunge reflects negative sentiment on the US dollar, which has continued to lose its allure as a safe haven asset for most global market speculators. Forex traders’ sentiment on the dollar has fallen sharply since President Donald Trump administration and subsequent global tariffs, ones that distort the globalization of traders.
The U.S. dollar extended its longest slump in five decades Tuesday as President Donald Trump stepped up his pressure campaign on Federal Reserve Chairman Jerome Powell to lower interest rates.
Also, Senate lawmakers voted on a Republican tax-and-spending bill that will add trillions to the national deficit. The dollar’s overnight decline, which put the greenback at its lowest level in three years, followed a coordinated move by the White House to criticize the Fed chairman.
White House Press Secretary Karoline Leavitt unveiled a note written by the president atop a page of global central bank interest rates last night, with an arrow suggesting the U.S. borrowing costs should be somewhere between 0.5% and 1.75%.
The current Fed Funds rate now sits between 4.5% and 4.75%, and while markets are betting on a quarter-point reduction in September, Powell himself has said that sticky inflation and a robust jobs market has left he and his colleagues “in no hurry” to lower rates.
Trump plans to name a shadow Fed chairman who would act as a monitor to central bank policy before Powell’s departure next spring.
This has raised the issue of the Fed’s independence but also added extra pressure to the U.S. dollar over the past month. The U.S. dollar index, which tracks the greenback against a basket of six global currencies, was 0.4% lower on the session at 96.47.
The index hit 96.38 in overnight trading, the lowest since February 2021 and a move that extends the index’s 2025 slide to just over 11%, the dollar’s worst start to a year since 1973. CBN Sells N7.12trn OMO Bills to Investors in Q2
