Overview
- In 2025 the dollar logged its biggest annual drop in eight years, and the dollar index remains about 1% below its start‑of‑year level despite a recent bounce.
- Goldman Sachs says the recent injection of policy uncertainty is likely to prevent the currency from making up lost ground.
- The greenback fell more than 5% in the days after President Trump announced 'Liberation Day' tariffs last April and has yet to reclaim those losses.
- Traders are building hedges in the euro, the Swiss franc, and gold as geopolitical risk and policy uncertainty rise.
- President Trump nominated former Fed governor Kevin Warsh to replace Jerome Powell, a move that briefly lifted the dollar as markets weighed the prospect of rate cuts, and he told NBC News he would not have chosen a chair who wanted to raise rates.