The U.S. dollar (USD) has fallen to its weakest level in three years, driven by a confluence of shifting trade policy, heightened market uncertainty, and escalating expectations of Federal Reserve interest rate cuts. The U.S. Dollar Index (DXY) has dropped nearly 10% year-to-date, underscoring a broad retreat from the greenback amid weakening investor confidence in U.S. monetary and fiscal direction.

The U.S. dollar (USD) approached its lowest level of 2025 on Thursday, while global equities pulled back from all-time highs. This market pivot was driven by renewed geopolitical anxiety and fragile progress in U.S.-China trade negotiations. Rising tensions in the Middle East and mixed signals from macroeconomic data pushed investors toward traditional safe-haven assets, including gold, Treasuries, and the Japanese yen (JPY).