Dollar Index Plunges To 3-Year Low As Trump Tariffs-Led Trade Wars Intensify: Analyst Says 'Dollar Confidence Crisis' Now In Full Mode

DXY declined over 1% to 99.67 on Friday morning as trade wars between the world’s largest economies gained momentum.
In this photo illustration, US 1 dollar bill seen placed on a table
In this photo illustration, US 1 dollar bill seen placed on a table. (Photo Illustration by Sheldon Cooper/SOPA Images/LightRocket via Getty Images)
Profile Image
Rounak Jain·Stocktwits
Updated Jul 02, 2025 | 8:31 PM GMT-04
Share this article

The U.S. dollar index (DXY) registered its biggest fall in three years, falling below the 100 level for the first time since 2022 as trade wars between the U.S. and China intensified, taking a toll on the greenback’s status as the world’s reserve currency.

At the time of writing, DXY was hovering at 99.67, following a 1.2% decline. It plunged to 99.25, falling almost 10% from its recent high of 110.

The dollar declined against the Swiss franc, Japanese yen, euro, and Canadian dollar as traders turned bearish on U.S. assets.

“The question of a potential dollar confidence crisis has now been definitively answered – we are experiencing one in full force,” ING Bank NV analysts wrote in a note, according to a Bloomberg report.

“The dollar collapse is working as a barometer of ‘sell America’ at the moment,” the ING note added.

On Friday, some of the major banks, including JPMorgan Chase & Co. (JPM), Morgan Stanley (MS), and Wells Fargo & Co. (WFC), reported their first-quarter earnings.

While JPMorgan and Bank of New York Mellon (BNY) beat Wall Street estimates with their first-quarter performance, the management commentary will likely shape the market’s views.

JPMorgan CEO Jamie Dimon had a word of caution for the U.S. economy, warning that it is facing “considerable turbulence,” with factors like tariffs and elevated fiscal deficit weighing down on growth prospects.

The declining confidence in the greenback has also led to a surge in gold prices, with the yellow metal rising to a record high. At the time of writing, spot gold prices stood at $3,225 per ounce, gaining 1.6%.

This comes amid escalating tensions between the U.S. and China, with both countries hiking tariffs in a tit-for-tat manner over the past few days.

While the U.S. has hiked effective tariffs on Chinese goods to 145%, China has retaliated with a 125% tariff on U.S. goods.

For updates and corrections, email newsroom[at]stocktwits[dot]com.

Subscribe to The Litepaper
All Newsletters
Get the daily crypto email you’ll actually love to read. It's value-packed, data-driven, and seasoned with wit.

Also See: US Stock Futures Trade In The Green At The End Of A Volatile Week: All Eyes On Bank Earnings

Read about our editorial guidelines and ethics policy

Advertisement. Remove ads.