U.S. Dollar Sees Worst First Half in 50 Years as Money Supply Breaks Records
The U.S. dollar is off to its worst yearly start in over 50 years, with the Dollar Index (DXY) plunging 10.8% in the first half of 2025—its steepest H1 decline since Richard Nixon’s presidency.
At the same time, the country’s money supply has surged to historic levels, raising new concerns about monetary stability.
Data from the Federal Reserve Bank of St. Louis reveals that the M2 money supply reached $21.94 trillion in May, breaking past its previous 2022 peak. The spike in circulating cash, combined with ballooning deficits and weakening economic indicators, is feeding bearish sentiment around the dollar.
JPMorgan’s Meera Chandan, co-head of global FX strategy, sees no short-term relief for the greenback. Speaking on the firm’s podcast, she projected further declines across major currency pairs, including EUR/USD climbing to 1.22 and USD/JPY falling to 140. Structural issues and a moderating U.S. economy, she said, continue to weigh on the outlook.
While the Fed remains cautious about future rate cuts, the broader market is pricing in continued dollar weakness, particularly as other economies begin to stabilize and pursue growth-oriented fiscal strategies. With foreign currencies gaining strength and global investors shifting exposure, the dollar’s dominance may be facing a rare period of structural decline.
Alexander Zdravkov
Reporter at Coindoo
Alexander Zdravkov is a person who always looks for the logic behind things. He is fluent in German and has more than 3 years of experience in the crypto space, where he skillfully identifies new trends in the world of digital currencies. Whether providing in-depth analysis or daily reports on all topics, his deep understanding and enthusiasm for what he does make him a valuable member of the team.
