The US dollar is experiencing a turbulent week again, and traders are reassessing Trump’s policies, citing geopolitical risk. The DXY index, which tracks the performance of the greenback, has fallen to the 97.1 mark after briefly dipping to the 96.9 range on Tuesday.
The USD is at risk of heading south as the US dollar’s stability is being questioned. The first major dip occurred in April 2025 after Trump’s Liberation Day tariffs. For nine months, the greenback has rarely seen a recovery and is struggling to climb above the 100 level.
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The Worrying Decline of the US Dollar
The DXY index has lost 9.6% of its value in a year and is in a steep decline compared to other assets. Commodities like gold, silver, and copper are skyrocketing, making traders reassess their investments in the US dollar. Holding the currency is now a loss-making strategy which traders are mostly looking to avoid.
A quick rebound is also off the cards as Trump’s trade wars and tariffs are only growing, including with close allies. The whirlwind of changes is affecting the US dollar’s prospects, making it weak in the charts. “There are a number of factors coming together,” said Seema Shah, Chief Global Strategist at Principal Asset Management.“I don’t think this is a ‘Sell America’ trade, but the fundamentals are coming together, and faster than expected,” she summed it up to Reuters.
If tariffs and trade wars made the markets volatile, Trump’s Greenland push is making it turbulent. Allies in Europe are looking to extend a hand to developing countries to protect their economies. The developing countries in question are selling US dollar-denominated assets to buy gold and diversify their central bank reserves.
Therefore, all market developments are against the US dollar’s growth. Investors who hold on to the currency might experience losses or see their money stagnate. It is best to take an entry position in gold, silver, or copper to make money when the market is hot.