The US dollar touches its lowest level in 4 years !! Has the era of weak American currency began?
Dollar The American touches its lowest levels
In a remarkable shift in the global currency markets, witnessed The US dollar A sharp decline, to approach its lowest levels in front of euro Since 2021, amid increasing fears of the financial repercussions of the project New tax law Which was announced by the American President Donald Trump. This decline comes in light of the state of Understanding on American commercial negotiations With its international partners, which gradually lost confidence in the American currency and pushing investors to search for a safer alternative haven.
The American currency is declining despite the continuation of the relative economic power
The US dollar is one of the most important Global currencies The most circulating is used as a main reserve currency in central banks, and is considered a standard for pricing most strategic goods such as oil and gold. However, political and financial developments within the United States, especially related With tax policies Public finance directly affects the value of the dollar in international markets.
In the latest development, market data showed on Tuesday that the dollar continues to decline against a basket of currencies, to reach its index to 96.612 pointsAnd it is its lowest level since February 2022. The euro also recorded a significant increase against the dollar at a level $ 1.1808And it is the highest in about four years.
Trump Tax Law raises concern
antiquities Tax and spending bill Which President Trump pushed a state of controversy within the United States, where opinions were divided among supporters who see a way to stimulate growth, and opponents warn of His consequences for public debt.
According to economic reports, the new law may lead to Increase the American debt by about 3.3 trillion dollars During the coming years, which prompted the markets to A negative reactionBy declining confidence in the American currency, and increasing demand for other currencies such as The euro, the Japanese yen, and the pound sterling.
Political division deepens the crisis
It is noteworthy that the new law did not pass smoothly within the US Senate, as it faced sharp objections by Democrats and even some Republicans, who considered that the project might be undermined Long -term financial stability For the United States.
These political divisions have been reflected in the performance of the dollar, as investors were afraid of the stumbling of the law, or amendments that affect Public budget For the state.
Economic data increases pressure
In addition to political repercussions, investors are awaiting A series of economic data Important this week, on her head Job report in non -agricultural sectors In the United States, it is scheduled to be issued on Thursday.
Expectations indicate that the American economy added Only 110,000 new jobs in June 2025Compared to 139 thousand jobs in May, which represents Slow down in the labor marketAnd the Federal Reserve (US Central Bank) may push Reduce interest rates At faster than expected.
Expectations to facilitate monetary policy
According to a report from Goldman Sachs, it is expected to take place Federal reserve three discounts At interest rates this year, by a quarter of a percentage point at a time, compared to previous expectations with only one reduction in December. These expectations have increased pressure on the dollar, which is directly affected by any interest reduction, due to the decline in its attractiveness compared to other currencies with higher returns.
Reactions from Trump: an attack on the federal reserve
For his part, President Trump did not hide his dissatisfaction with a policy Jerome PowellThe head of the US Central Bank, where he sent him a memorandum containing Comparisons between global interest ratesNoting that the American interest should be similar to those in Japan (0.5%) or Denmark (1.75%).
This public attack on Independence of the Federal Reserve A wave of anxiety among investors, who are afraid of Direct political intervention In monetary policies, which may affect the US financial credibility against the world.
Gold and other currencies benefit from the weakness of the dollar
In light of these developments, the markets witnessed clear transformations, most notably:
- High price gold,, Which is considered a safe haven at the time of the turmoil, taking advantage of the dollar weakness and the anticipation of investors for the US Central Bank’s decisions.
- Stability of the pound sterling At 1.3739 dollars, which is close to its highest level in more than 3 years.
- Japanese yen climbing To 143.77 for the dollar, achieving 9% gains in the first half of the year, which is the most powerful pace since 2016.
Commercial tensions deepening the dollar crisis
Add to that Understanding on American commercial negotiationsEspecially those related to customs duties with partners such as the European Union, China and Mexico. According to informed sources, the talks are still complicated and full of obstacles, which leads investors to worry about the absence of decisive agreements that restore balance to global trade.
And with approaching The deadline for the suspension of customs duties On the ninth of July, the state of anticipation is increasing in the markets, amid the absence of strong indicators on the United States to settle with its commercial partners.
Did the dollar enter the stage of structural decline?
The dollar decreased by more than 10% in the first half of 2025 It raises questions about whether this decline is circumstantial or beginning A stage of structural decline In the value of the American currency. Some analyzes suggest that the dollar faces increasing pressure that may last for a long time, unless American financial and monetary policies are stable, and the levels of debt and deficit are controlled.
The US dollar touches its lowest levels: the markets are waiting for decisiveness
In light of these data, investors are anxious The next steps for the Federal Reserve CouncilIn addition to the results of commercial negotiations, the fate of the proposed tax law from Trump. All eyes remain directed towards European Central Bank Forum Holding in Portugal, where Jerome Powell is expected to make statements that may carry decisive references on the future of American monetary policy.
In the end, the current dollar is represented An indication of the health of the American economy and the confidence of global investors. Any wrong political or economic decision may lead to a continued decline, and perhaps to Reinstall the map of global currencies in the near future.
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