U.S. Dollar Index Falls Nearly 10% in 2025 Amidst Global Changes

In 2025, the U.S. Dollar Index fell nearly 10%, marking its worst performance in over 50 years, as traders reacted to geopolitical tensions and policy shifts. Following the onset of the Iran war on February 28, the dollar temporarily strengthened against major currencies but weakened again as crude oil prices fell. Deutsche Bank's analysis suggests potential erosion of the dollar's dominance, while Franklin Templeton challenges this view, emphasizing the dollar's critical role in global trade. The percentage of dollar reserves has decreased from over 70% in 1999 to just over 50% today, indicating shifts in currency dominance.