US Dollar Plummets: Biggest Drop Since 2017, What's Next for Global Markets?

• The US dollar experienced its largest annual decline since 2017 in 2025, with the DXY slipping 8-10%.
• Market expectations of Federal Reserve interest rate cuts and uncertainty in US monetary policy are key drivers of the dollar's weakness.
• US politics, potential trade wars under Donald Trump, and speculation about a dovish Fed Chair further pressured the dollar.
• Global policy divergence, with hawkish stances from the ECB and BoE, strengthened other major currencies against the dollar.
• Brokerages predict continued dollar weakness into 2026, with DXY potentially falling to low-90s, impacting USD/INR.

Why It Matters: The US dollar saw its biggest fall since 2017 due to policy shifts and global factors, with weakness likely to continue.