🇺🇸🔻Dollar Index Extends Trump Term's Losses: Cable FX Macro

• Trump's second term began after the DXY had risen significantly under the prior administration (from ~90.6 at Biden's start to ~109.4 by January 2025). Expectations initially pointed to potential dollar strength from tariffs, growth policies, and Fed caution.

• The index experienced substantial depreciation through much of 2025, with reports of an ~10–11% annual decline in 2025—the largest since 2017 or even earlier periods.

• Tariff announcements and trade policy uncertainties, which have introduced global growth risks and eroded confidence.

• Trump's comments regarding dollar declines have been interpreted by the markets as a sign of tolerance for a weaker currency, which could have various implications for the U.S. economy and global financial markets. While a weaker dollar may offer some short-term benefits, such as boosting exports, it also carries risks that could affect inflation, investment, and overall economic stability. As such, the ongoing discourse around currency value will remain a critical area of focus for policymakers and market participants alike.

• Shifts in Fed expectations, global risk-on sentiment boosting other assets (e.g., gold rallying), and broader concerns over US debt, inflation risks, and policy unpredictability.