The US dollar has endured its worst first half-year in over 50 years, plummeting 10.8% against a basket of currencies, primarily due to the impact of Donald Trump’s tariffs and concerns about their economic fallout. This marked its weakest performance since 1973, and the greenback now sits at its lowest point since March 2022. The tariffs have created significant uncertainty, leading investors to question the dollar’s traditional role as a safe haven.
The pound has capitalized on this weakness, surging to a three-year high. While the dollar struggled, US stock markets experienced a turbulent but ultimately upward trajectory. An early April global sell-off, triggered by Trump’s “Liberation Day” tariffs, was followed by a remarkable rebound. This recovery, described as only the third time in 100 years the S&P 500 has dropped 10% and recovered to a gain within the same quarter, suggests that temporary pauses in tariffs and hopes for future trade deals have buoyed investor spirits.