Summary
This technical report provides an analysis of the U.S. dollar's performance in 2025, highlighting a notable decline of approximately 8% in broad trade-weighted terms and around 10% against major currencies. Despite this downturn, the report indicates that the dollar remains close to its 2024 levels and averages over the past decade. Factors contributing to the dollar's depreciation include expectations of U.S. import tariffs and the impact of Fed rate cuts on investor sentiment. The report details the dollar's performance against various currencies, noting significant losses against the euro and the pound. Looking ahead to 2026, a modest further depreciation of about 3% is anticipated, influenced by ongoing economic conditions and central bank policies. The report also addresses the concept of 'de-dollarization,' indicating that while there is a gradual shift away from the dollar, it remains dominant in global finance. Overall, the analysis underscores the complexities surrounding the U.S. dollar's status in the international market.
