Trade tensions and U.S. debt worries weigh on greenback
The U.S. dollar extended its losing streak Monday, hitting a near four-year low against the euro and declining across major currencies as concerns over America’s ballooning deficit and trade uncertainty continued to rattle markets.
Senate Republicans are pressing forward with President Donald Trump’s sweeping tax and spending bill, despite internal divisions over its projected $3.3 trillion impact on national debt. The dollar dropped 0.63% to 0.79355 against the Swiss franc, on track for a 3.6% monthly decline. Year-to-date, the greenback has lost about 12.5% against the Swiss currency.
Against the euro, the dollar slid to $1.1780—its lowest level since September 2021. The euro is poised for a 3.8% gain this month and has appreciated nearly 14% this year. “The dollar has been on a weakening trend,” said Amo Sahota, executive director at Klarity FX. “We’re halfway through the year, and the big winners have been the euro, the Swiss franc, and the krona.”
Tariff uncertainty clouds trade outlook
Geopolitical friction and trade negotiations added to pressure on the dollar. Treasury Secretary Scott Bessent confirmed that even nations negotiating in good faith may still face steep tariffs after July 9. The U.S. and China recently resolved disputes over rare earth mineral exports, while EU officials indicated openness to a 10% universal tariff on certain exports as part of a broader deal with Washington.
However, abrupt policy shifts continue to unsettle markets. Trump temporarily reversed course on tariff talks with Canada, leading to further doubts about a coherent trade policy. Canada, in turn, suspended the launch of its digital services tax targeting U.S. tech firms in hopes of reviving negotiations.
“We’re seeing a weak dollar driven by fiscal concerns and ongoing trade deal uncertainty,” said Eugene Epstein of Moneycorp. “There’s a constant shift in focus—be it the deficit, trade policy, or Middle East tensions—that keeps markets on edge.”
Dollar under pressure across global markets
The dollar index, which tracks the greenback against six major currencies, fell 0.35% to 96.86, marking its sixth consecutive monthly decline and its worst half-year performance since the 1970s. The Japanese yen gained 0.36% to 144.45, leaving the dollar flat for the month against the yen.
Meanwhile, the Canadian dollar rose 0.41% to C$1.353, posting its fifth straight monthly gain. The Swedish krona strengthened 0.48% to 9.462 per dollar, while the British pound edged up 0.04% to $1.3719 and is up 2% for June.
With the dollar under sustained pressure, market participants are bracing for continued volatility as fiscal and trade uncertainties dominate headlines. Analysts warn that any resurgence in inflation, policy surprises, or geopolitical escalations could further unbalance the currency outlook.
