US Dollar Drops to 3.5-Year Low on Global Markets

The US dollar has fallen to its lowest level in 3.5 years against the euro and British pound, according to Reuters. Market expectations are rising that the US Federal Reserve (Fed) may sharply cut interest rates this year, contributing to the dollar's continued weakness in global financial markets.

Investors are focused on US monetary policy. Reports suggest President Donald Trump is considering replacing current Fed Chair Jerome Powell with a more dovish candidate. This has further fueled investor expectations of interest rate cuts.

Although Powell's term ends in May 2026, The Wall Street Journal reported that Trump might announce his replacement as early as this fall. Analysts warn that such a nominee could act as a “shadow chair,” potentially influencing markets before taking office.

The euro is currently trading around $1.1693 — its highest level since September 2021. The pound sterling has reached $1.3733, nearing its October 2021 high.

The US Dollar Index, which measures the dollar against six major currencies, is at 97.378 — its lowest since March 2022. It has declined by over 10% so far in 2025, including a 2% drop in June — marking the sixth straight month of decline.

The Japanese yen stands at 144.73 per dollar, while the Swiss franc has strengthened to 0.8013 — its strongest in a decade.

Investors are also watching for progress on global trade deals ahead of the July 9, 2025 deadline for Trump's “reciprocal” tariffs. German Chancellor Friedrich Merz has called for a “quick and simple” trade agreement between the EU and US.

Additionally, the White House announced that the US and China have reached a deal to accelerate the export of rare earth elements to the United States, a positive development for the manufacturing sector.

The dollar's weakness is having a significant impact on global financial markets. Expectations of rate cuts, potential changes at the Fed, and trade negotiations will shape the dollar's future trajectory. This could also directly affect Uzbekistan's foreign trade partnerships and import-export strategy. Read 'Zamin' on Telegram!