📉 THE DOLLAR DRAG: 2025 Marks the Greenback’s Worst Year in Nearly a Decade
The "King Dollar" era just hit a massive speed bump.
After a powerhouse 2024, the US Dollar Index (BBDXY) just closed out 2025 with a staggering -8.2% decline. This isn’t just a minor pullback—it is the sharpest annual drop since 2017 and one of the weakest performances the currency has seen since 2003.
🔍 The Big Reversal
Just twelve months ago, the Dollar was riding high on a +8% gain. That entire rally has now been wiped out. What changed?
The Fed Pivot: As interest rates began to cool, the "yield advantage" that kept investors flocked to the Dollar started to evaporate.
The Sentiment Shift: For the first time since mid-October, hedge fund positioning has officially turned bearish. According to recent CFTC data, the "smart money" is now betting against a Dollar recovery in the near term.
Historical Rarity: Annual declines are rare in the modern era. Since 2010, the Dollar has only posted a yearly loss 5 times. 2025 now joins that short list of historic outliers.
🚩 What’s Next?
All eyes are on the Federal Reserve. With the Dollar sitting at multi-year lows, the next move in US monetary policy won’t just affect inflation—it will dictate whether the Greenback regains its crown or continues its slide into 2026.
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