Dollar Meltdown: Why the Greenback’s Worst Slide Since 1973 Could Shake Global Markets
The U.S. dollar (DXY), a key driver across global markets, threatens to close another week in the red as traders brace for new tariff moves ahead of the July 9 deadline. Weaker-than-expected June job data and renewed concerns over U.S. fiscal policy have kept Dollar weakness trending, and it’s now testing lows not seen since February 2022.
President Trump’s recently approved “big, beautiful” tax and spending bill, which may add $3.4 trillion to the U.S. national debt, has strengthened fears over fiscal sustainability and stirred volatility in bond markets. The dollar has been among the worst performers, suffering its steepest first-half decline since 1973—down some 11% year-to-date.
Employment numbers provided a brief reprieve after June nonfarm payrolls came in at 147,000 and the unemployment rate fell to 4.1%, yet the DXY quickly retreated below 97.00 amid the holiday-thinned markets on July 4.
This Dollar pullback is echoing across currencies: the euro and yen have strengthened, prompting speculation that the ECB might follow suit with rate cuts. Concurrently, gold continues its rally—up ~26% this year—as investors seek refuge amid U.S. debt concerns.
With markets now bracing for a second week of dollar decline, talk of "de‑dollarization" and mounting global unease may build momentum for continued weakness. Watch for the July 9 tariff deadline and debt dynamics—these could be the catalysts that shape currencies, commodities, and stocks in the ride ahead.