The US dollar is under pressure as global investors grow increasingly wary of America's fiscal trajectory.
Once seen as a reliable safe haven, the greenback is now facing renewed skepticism, with strategists telling Yahoo Finance that capital is shifting toward undervalued currencies in Europe and Asia amid expectations of foreign stimulus and more attractive valuations abroad.
The US Dollar Index (DX-Y.NYB) — which tracks the dollar's value against a basket of major currencies including the euro, Japanese yen, British pound, Canadian dollar, Swedish krona, and Swiss franc — has dropped more than 8% since the start of the year, underperforming every other G10 currency, according to Bloomberg data. It ranks as one of the worst-performing asset classes of the year, alongside Brent Crude (BZ=F).
Since April, the index has dipped below the crucial technical and psychological level of 100, hitting lows not seen since 2022.
“Investors now have a very strong reason to hedge their long US asset exposure, and the dollar is no longer behaving like a safe haven,” Jayati Bharadwaj, FX and macro strategist at TD Securities, told Yahoo Finance on Wednesday. “I would say it's actually following much more of an emerging market playbook, which is the unfortunate truth that we need to come to terms with.”
