US Dollar Falls to Lowest Since February 2022 Amid Fiscal and Tariff Concerns

US Dollar Falls to Lowest Since February 2022 Amid Fiscal and Tariff Concerns

The US Dollar (USD) continued its decline, with the US Dollar Index (DXY) dropping to around 96.45 — its lowest level since February 2022 — marking a ninth consecutive day of losses. Persistent concerns over US fiscal health, escalating tariff tensions, and political pressures on the Federal Reserve (Fed) are keeping the Greenback under pressure.

The DXY has closed red for six straight months, shedding over 10% in the first half of 2025, marking its worst performance for the first half of a year since currencies began floating in 1973. The US Dollar weakened against all major G10 currencies during this period as investors moved away from dollar-denominated assets.

Key drivers of the dollar’s sharp decline include uncertainty around US President Donald Trump’s economic policies. His expansive tax-and-spending plan, dubbed the “One Big Beautiful Bill,” has unsettled markets with concerns about fiscal instability. The proposal includes permanent tax cuts and steep spending reductions that could increase US debt by more than $3.3 trillion.

Market participants now focus on upcoming events, including Federal Reserve Chair Jerome Powell’s speech, the ISM Manufacturing PMI, and JOLTS employment data, to gauge the short-term direction of the US Dollar.

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