Trump Oversees Worst Dollar Start to Year in Over Half a Century
The Financial Times reported that the U.S. Dollar Index was now down by 10 percent over the course of 2025, making it the weakest performance since the end of the Bretton Woods system, which was underpinned by the dollar's convertibility to gold.
The news concides with the U.S. Senate gearing up to pass Trump's much-tweaked One, Big, Beautiful Bill, the tax-cutting provisions of which are set to expand the deficit by trillions of dollars over the coming decade.
Trump upended the global trading system in April when he introduced individualized "reciprocal" tariffs on trade partners, intended to reflect the barriers he said the U.S. faces around the world.
He later paused those tariffs for 90 days amid market turmoil and fears of sparking a U.S. recession, to give space for trade talks, and recently indicated the deadline is not hard if those discussions are making progress.
Import tariffs typically strengthen the currency. But Trump's disordered approach to trade—which his allies say is intentional and increases the pressure on partners, key to his approach to dealmaking—coupled with U.S. debt worries and his pressure on the Fed to cut interest rates have put downward pressure on the dollar.
A key purpose of Trump's "America first" trade policy is to protect and rebuild the domestic manufacturing sector, which may benefit from a weaker dollar, but any advantage would be mitigated by the retaliatory import tariffs against the U.S.
A weak dollar—the world's reserve currency—also has painful reverberations around the world for those who conduct trade in U.S. dollars.
Global companies with lucrative U.S. divisions will now see weaker dollar revenues as they convert them into other currencies.
This is a breaking story. Updates to follow.
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