The US dollar suffered its largest single-day drop since Inauguration Day, falling 1% to a three-month low as markets grew concerned about tariffs hurting American economic growth.
The Bloomberg Dollar Spot Index weakened to its lowest level since November, with the euro climbing to nearly $1.08 after Germany announced plans for massive defense and infrastructure investments.
Analysts suggest this decline reflects investors pricing in the negative impact of trade tariffs on US growth rather than on targeted countries, with markets now anticipating more interest rate cuts from the Federal Reserve.