Dollar Crashes to Lowest Levels in Over Three Years!
Have you noticed the dollar losing strength like never before? Last week, the dollar fell to its lowest levels in over three years, while the euro jumped a whopping 1.7% against the greenback! The dollar index, which measures the value of the US currency against six major world currencies, dropped 1.5% to 97.25 points, close to its lowest since March 2020.
What’s going on with the dollar?
The dollar also weakened against the Japanese yen, dropping 1% to 139.65 yen. Why? Mainly because of the chaotic and unpredictable tariff policies of President Donald Trump, which have thrown markets into turmoil. Although the dollar is traditionally a safe haven in uncertain times, even the Israel-Iran conflict couldn’t keep it afloat — the dollar briefly strengthened, but as soon as a ceasefire was agreed, it came under pressure again.
Economy slowing down, interest rates under pressure
Another big reason for the dollar’s fall is the slowing US economy. The first quarter saw a 0.5% annual drop in GDP, ringing alarm bells for investors. Expectations are that the Federal Reserve (Fed) will cut interest rates three times this year, starting as early as July. While the market gives only about a 20% chance of a July cut, chances are higher for September, with a total of two to three cuts expected by year-end.
Fed vs. Trump: The showdown
Some Fed officials say the tariff hikes haven’t significantly impacted inflation, so there’s room to cut rates. But President Trump keeps pushing Fed Chair Jerome Powell to slash rates immediately. Powell, however, warns the Fed shouldn’t rush and should wait for more data on how tariffs affect the economy and inflation.
What’s next?
All in all, the dollar is free-falling, while the euro and other currencies are gaining strength. If you thought this was just a phase, think again. This situation could have huge consequences for the global economy, your savings, and everyday prices.
So, what do you think? Have you noticed the dollar’s nosedive, or are you still in shock? Drop your thoughts below — maybe together we can figure out what’s coming next! Or just crack a joke about dollars; hey, we all need a laugh in these crazy times.
