US Dollar Falls to Lowest Level Since 2022 Amid Escalating Trade War Concerns

The US dollar continued its decline on Friday (April 11), as growing uncertainty surrounding the US-China trade tensions prompted investors to gradually pull back from the greenback.

According to Reuters on Monday (April 14), the US Dollar Index (DXY)—which tracks the dollar’s performance against a basket of global currencies—fell by 0.56% to 99.958, marking its lowest level since April 2022.

Brad Bechtel, Global Head of FX at Jefferies, attributed the dollar’s drop to mounting concerns over President Donald Trump's tariff policies and the risk of a reignited trade war.

“The dollar is under pressure due to weakening confidence in the US economy’s strength, with fears of a looming recession,” Bechtel stated.

The dollar's decline was accompanied by widespread global sell-offs affecting equities and even traditionally safe assets such as US government bonds. The 10-year Treasury yield recorded its biggest weekly surge since 2001.

Meanwhile, currency investors have started diversifying away from the dollar, shifting their exposure toward safe-haven currencies like the Japanese yen and Swiss franc. Bechtel described this as a “major rotation” away from dollar reliance.

“Foreign investors are increasingly moving into other regions like the eurozone and are implementing hedging strategies to mitigate currency risks,” he explained.

Adding to the pressure, recent US economic data revealed a sharp drop in consumer sentiment for April 2025. Inflation expectations for the next 12 months also soared to their highest level since 1981.