The dollar decrease faces more winds against after publishing the worst return of the first half in 52 years

Just out of his worst performance since Richard Nixon was president, the US dollar faces a variety of winds against that they are aimed at the second half of the year that could have important investment implications.

The Greenback fell 10.7% against its global peers until June, which makes it the worst first half since 1973, when Nixon broke the Bretton Woods gold standard. At the bottom, the currency reached its lowest point since February 2022.

The way ahead may not seem much brighter.

This is because many of the same factors (policy volatility, swelling and deficit debt and possible interest rate cuts of the Federal Reserve, to name a few, will probably remain in the minds of investors, since they look for other ways for safe shelters.

“There was probably some of this, and we have certainly given the foreign exchange merchants enough to contemplate what the catalyst is now,” said Art Hogan, head of the B. Riley Wealth Management market. “You could mark many boxes. You are running mass deficits, and nobody wants to stop on both sides of the hall. You are alienating friends both militarily and trade. You have enough potential negative catalysts. And then, once the impulse begins, it is difficult to stop it.”

In fact, the slide of the dollar began in mid -January and has shown only occasional signs of moderation since then. The hope that the tariffs of President Donald Trump are not as steep as thought helped to cause a brief rally in mid -April, but for the most part the gravitational attraction has been lower.

Of course, the dollar slide has not been exactly poison for shares.

With more than 40% of income for S&P 500 companies from international sales, a weaker dollar helps US exports be cheaper, an important point to consider in the midst of the current commercial war.

However, the lowest movement has coincided with a growing talk about the potential end of American exceptionalism and dollar hegemony, with the public participation of US debt about $ 30 billion and the 2025 deficit on the way for about $ 2 billion. If US assets, such as Greenback and Treasury debt, lose their prominence on the global stage, which could have strong ramifications for risk assets as actions.

Global central banks, meanwhile, are increasing their gold purchases, 24 tons per month, according to the Gold Council World Cup, as an alternative to the assets of the United States. Gold had his best career in the first half since 1979.

“We believe that central banks are buying gold to diversify reserves, reduce dependence on [dollar]And coverage against inflation and economic uncertainty, “Lawson Winder, research analyst at Bank of America, said in a note. Winder said it is” a trend that we believe will continue, especially amid the uncertainty surrounding US tariffs and fiscal deficit concerns. “

Similarly, Ts Lombard is maintaining a short position in the Greenback, which calls “the gift it continues to give.”

“Trump’s attacks against the Fed and the explicit desire of the administration of a weaker dollar only add to that point of view,” Daniel von Ahlen wrote, a senior macro strategist of the firm. “The dollar remains overvalued in most FX metrics … with omnipresent USD negatives, why not expect the dollar to undervalue? We remain firmly short in dollars in a variety of operations in our book.”

The Federal Reserve could also exert more downward pressure when reaching the expected target cuts in the back of the year. However, the impact of the loosening of the Fed can be difficult for disability, considering that the yields of the dollar and the treasure increased abruptly when the central bank was last reduced in 2024.

Without a doubt, the continuous decline of the dollar is not in any way a safe thing, and others on Wall Street think that the trend could be reversed.

Thomas Matthews, Chief of Asia Pacific in Economics Capital Markets, said the recent shares in a growing comfort with US assets, with the weakness of the previous dollar perhaps only a product of the expected appreciation of other currencies, as well as a change in coverage strategies.

Wells Fargo also believes that fears related to the dollar are exaggerated.

“Adopting a statistical approach to analyze the role of the US dollar, it is clear that the backback is still the axis of trade and global finances and is far from irrelevant,” wrote the investment strategy of Wells Fargo, Jennifer Timmerman. “We believe that the US dollar benefits from deep advantages (such as the rule of law, transparency and a highly liquid financial market) that cause a global change of the dollar an extremely difficult and slow movement process, especially due to the underlying weaknesses of the most visible dollar alternatives.”

The secretary of the Treasury, Scott Besent, also intervened, telling CNBC on Monday that monetary fluctuations “are not out of the ordinary.”

However, the increase in treasure debt yields also means that concerns about the dollar and other US assets persist.

“We are at that stage of being exaggerated in the disadvantage in terms of impulse,” said Hogan, B. Riley’s strategist. “But fundamentally, you could certainly do many things that would worry you.”