The Bloomberg Dollar Spot Index just hit its lowest level since April 2022, marking an over 8% drop for the dollar so far in 2025.
This isn’t just a minor blip; it’s a significant move with all G10 currencies gaining against the dollar, the euro reaching its strongest since 2021, and the British pound hitting a three-year high. Even emerging-market currencies are up over 6% this year.
What’s driving this dollar weakness? A confluence of factors, including muted U.S. producer price inflation in May, rising expectations of Federal Reserve interest rate cuts, and a renewed sense of economic uncertainty fueled by Trump’s threats of unilateral tariffs.
Markets are reacting, with traders betting on further Fed easing. Even Paul Tudor Jones has predicted a potential 10% further dollar fall over the next year.
#EyeonVolatility
