DXY: US Dollar Wipes Out 11% in First Half — Its Worst Six-Month Start in More Than 50 Years

Quick catch-up: last time the buck lost that much for a first half was a few years after the moon landing.

🧐 Dollar Has Worst Start in 50+ Years

• The US dollar index DXY just clocked its worst first-half performance since 1973, plunging nearly 11% as forex speculators turned their backs on the greenback in droves.
• The benchmark measure now languishes near a three-year low of 96.60, territory last seen back in March 2022 — a stunning reversal for what’s historically been the world’s ultimate safe haven.
• The slide reflects mounting worries about Trump’s on-again, off-again tariff war, Washington’s ballooning borrowing needs, and concerns that the Fed’s independence is being eroded at a critical time for the global economy.

😎 Euro and Other Rivals Surge

• One major beneficiary? The euro, which just keeps on sprinting higher — now chasing $1.18, a level last seen in September 2021, and up more than 13% year-to-date against the dollar.
• Big banks that once bet the euro would sink to parity are now scrambling to rewrite forecasts as safe-haven demand shifts to German bonds and other alternatives.
• Other major currencies like the yen and pound have also notched impressive gains as investors rotate out of the dollar and rethink where to park cash amid US economic policy chaos.

🌍 The Bigger Picture: What’s Next for the Buck?

• Trump’s stop-start trade fights and tough talk on tariffs have rattled confidence in the dollar as a reliable store of value — especially given the huge US debt load that needs financing at a time when the Fed looks stuck.
• Traders are bracing for more drama in the second half: the Fed’s next move on rates, the lingering question of who might replace Powell at the Fed if Trump acts early, and the real-world impact of tariffs on US growth could all keep the dollar under heavy selling pressure.
• Meanwhile, euro bulls are licking their chops, with some calling for a test of $1.20 if the macro winds keep blowing the buck off course.