File image of U.S. dollar bills shown for illustration. · Reuters
The U.S. dollar slid to its lowest level against the euro in nearly four years on Monday, reflecting deepening investor concerns over rising national debt and stalled global trade negotiations.
Market anxiety is growing as Senate Republicans push to pass President Trump’s expansive tax cuts and spending package. The bill, expected to add $3.3 trillion to the national debt, has sparked unease even within the party. Meanwhile, uncertainty around trade agreements continues to weigh heavily on the greenback’s performance.
The euro soared to $1.1780—its strongest against the dollar since September 2021—marking a monthly gain of nearly 3.8% and a yearly rise of 14%. The Swiss franc also flexed its muscle, with the dollar losing 0.63% to trade at 0.79355 francs, marking a monthly drop of 3.6% and a year-to-date fall of 12.5%.
Amo Sahota, executive director of Klarity FX, explained, “There’s a lot of attention on whether this massive tax bill will pass. Meanwhile, the dollar has been steadily weakening this year.” Sahota noted that currencies like the euro, Swiss franc, and Swedish krona have significantly outperformed the dollar in 2025.
Further pressure on the dollar came from trade deal developments. The European Union is reportedly considering a 10% tariff on trade agreements with the U.S., according to Bloomberg. However, Treasury Secretary Scott Bessent warned that steep tariffs could still hit some countries by July 9—even if they’re in negotiations—leaving trade partners anxious.
On a slightly brighter note, the U.S. and China reached a revised agreement on exports of rare earth minerals and magnets, smoothing over disputes that had lingered since May. But fresh tensions arose as President Trump warned Japan of impending trade tariffs via a formal letter, muddying prospects of a stable trade path.
In a last-minute move, Canada backed off from implementing a planned digital services tax targeting U.S. tech giants. The suspension came just hours before rollout, signalling Canada’s attempt to unfreeze sluggish trade talks with Washington.
The loonie (Canadian dollar) gained 0.41% against the U.S. dollar, hitting C$1.353 and extending its win streak to five months. Meanwhile, the U.S. dollar slipped 0.36% to 144.45 against the Japanese yen, finishing the month with little change.
The dollar index, which compares the greenback to major currencies like the yen and euro, fell 0.35% to 96.86—marking its sixth consecutive monthly decline. If the trend continues, this will be the dollar’s worst half-year stretch since the 1970s.
Currency strategist Eugene Epstein summed up the chaos: “It’s like musical chairs. One week it’s the tax bill, next it’s trade wars, and then global conflicts take the spotlight. The dollar keeps losing ground as the world watches and reacts.”
Elsewhere, the Swedish krona rose 0.48% to 9.462 per dollar, while the British pound climbed slightly to $1.3719, up 2% for June.
