The US dollar has slid against most major currencies
Five charts to start your day
Good morning – here are your five chart for the day.
CHART 1 • US dollar performance against major currencies
The dollar's steady decline against every major currency tells a clear story: confidence is waning. Since January, the greenback has lost roughly 2% against the yuan, 6% against the Canadian dollar, and a more painful 10-11% against the yen, euro and peso. Sterling holders are up 8%. These aren't panic moves, but they're persistent and broadening.
Why it matters: this synchronised weakness reflects genuine concerns about US fiscal policy and trade uncertainty. The 10.8% drop in the dollar index marks the worst first half since 1973, according to multiple analysts. Central banks are diversifying reserves, with gold purchases hitting 24 tons monthly. More practically, Americans are paying significantly more for imports – everything from European cars to Mexican produce costs more. Business trips to London or Tokyo just got 10% more expensive.
The trajectory suggests further weakness ahead. With US debt approaching $30 trillion and political uncertainty high, international investors are demanding higher yields to hold dollars. JPMorgan puts recession odds at 40% by year-end. For portfolios, this means reconsidering currency hedges and potentially increasing international equity allocations while the dollar remains elevated historically. Want the other four? Become a paid subscriber.
Source: Sherwood
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