U.S. Dollar Crashes to Four-Year Low — Reserve Currency Role Under Scrutiny
The U.S. dollar has slid to its lowest point in nearly four years against major currencies, as broad market selling and confidence shifts weigh on the greenback. The dollar index (DXY) recently traded near 95–96, its weakest since 2022, after a series of policy-related pressures and global economic headwinds.
Analysts say political and economic uncertainty — including tariff disputes, concerns about Federal Reserve independence and expectations of future rate cuts — has weakened investor sentiment in the dollar. This has encouraged flows into alternative assets and currencies, with the euro, yen and other major currencies strengthening in the past sessions.
The decline has also sparked commentary from global regulators, with some cautioning that sustained weakness could lead markets to question the dollar’s role as the primary global reserve currency.
While a weaker dollar can benefit U.S. exporters by making goods cheaper abroad, it also raises import costs and inflationary pressure at home — and investors are keenly watching whether this trend signals deeper shifts in global finance.