How much value had the dollar lost in the last six months
Executive summary
The simplest answer: against a standard trade-weighted basket of major peers, the U.S. dollar lost roughly 11% in the first six months of 2025 — the biggest six‑month slide since 1973 — though broader annual and year‑to‑date measures put 2025’s full decline closer to “a little over 9%” depending on which index is used [1] [2] [3]. Context matters: different dollar indices, time windows and inflation adjustments produce different numbers, and by late 2025 and early 2026 the move had stabilized but not fully reversed [4] [5].
1. What the headline six‑month number means: an ~11% drop in H1 2025
Measured against a standard basket of major trading partners, the dollar fell about 11% from January through the end of June 2025 — a drop described by multiple research shops as the largest six‑month (first‑half) decline since 1973 (Morgan Stanley; Morningstar reporting) [1] [2] [6]. That 11% figure is the one most analysts cite when they say the dollar “lost” value over that six‑month span because it comes from widely used trade‑weighted indices and captured the sharp mid‑year repricing tied to policy uncertainty and geopolitical shocks [7] [1].
2. Why other summaries say “about 9%” instead of 11%
When outlets sum the dollar’s performance over the whole of 2025 they often report a slightly smaller number — “a little over 9%” down since January 2025 — because the currency partially recovered in July and spent the second half of the year nearer multi‑month lows rather than continuing the mid‑year plunge (Marketplace; NPR) [3] [8]. Different indices also yield different magnitudes: the DXY and broad effective exchange rates don’t move in lockstep, so a press headline citing “9%” may be using a different basket or averaging across a longer period that smooths the H1 shock [4] [9].
3. The technicalities that change the percentage: index, basket and inflation adjustment
Which index one uses matters: the common dollar index that many reporters cite (DXY) is weighted toward the euro, yen, pound, Canadian dollar, krona and franc; broader measures — like the real broad effective exchange rate adjusted for inflation — can show smaller or larger moves because they cover more currencies and strip out price effects (Reuters; tradingeconomics) [5] [9]. Analysts warn that nominal versus real, trade‑weighted versus dollar‑index readings will yield different “loss” numbers, so the roughly 11% six‑month figure should be read as index‑specific rather than a universal collapse [7] [1].
4. What drove the loss and why it mattered to markets
Research and reporting tie the mid‑2025 plunge to a mix of political and policy shocks — tariffs, fiscal worries and market bets on Federal Reserve easing — which eroded confidence and incentivized foreign investors to hedge or shed dollar exposure, amplifying the decline (Morgan Stanley; Morningstar; Quartz) [1] [10] [7]. That chain reaction turned a policy story into a market one: perceived U.S. policy risk led large holders of U.S. assets to reduce implicit dollar exposure, pressuring the currency further [7].
5. Where the dollar stood as the fall‑through and what to watch next
By early January 2026 the dollar was trading near multi‑month lows (DXY around 98) and metrics showed it down close to 9% over the past year in some series, signaling stabilization rather than full recovery (CambridgeCurrencies; tradingeconomics) [4] [9]. Forecasts diverge: some strategists expect a continued slide as global growth picks up and the Fed eases, while others see limited additional depreciation absent fresh shocks — underscoring that the “how much” question depends on which six months or index a reader has in mind (Reuters; Morgan Stanley) [5] [1].