The currency market has been profoundly shaken, as the US dollar recorded its worst first half-year performance in over 50 years. Its 10.8% plunge against a basket of currencies is a direct consequence of Donald Trump’s economic agenda, particularly his tariffs and a budget bill that analysts predict will significantly increase the national debt, undermining the dollar’s safe-haven status.
Unicredit analysts report a 10% loss for the dollar, while the euro has seen a 5% gain. David Morrison of Trade Nation highlights the “chaotic” nature of the Trump administration and concerns over US national debt as key contributors to the dollar’s decline. Despite this, the S&P 500 of US stocks managed to reach a record high by the end of June, indicating that the market has found ways to rally amidst the currency’s struggles, partly due to the “Taco” trade and the allure of AI.