US dollar drops 10% as global shift accelerates in 2025

The U.S. dollar’s dominance in global finance is facing mounting challenges as the currency experiences its steepest decline in years, according to warnings from Devere Group CEO Nigel Green and recent market data.

The Dollar Index (DXY) has dropped nearly 10% since its January peak, reaching lows not seen since February 2022, as investors react to a combination of trade tensions, policy uncertainty, and expectations of U.S. interest rate cuts.

“Dollar supremacy isn’t vanishing overnight, but its era of unquestioned dominance is fading. This carries enormous consequences for global portfolios, pricing, and capital allocation,” Green noted.

He emphasised that the shift is gradual but significant, with the dollar’s share of global reserves falling below 59%, down from over 70% at the start of the century.

The euro and Asian currencies, including the Chinese yuan, are increasingly being used in trade agreements that bypass the dollar, contributing to a more fragmented currency landscape.

Recent U.S. tariff policies and the resulting trade war have accelerated the dollar’s decline, prompting a sell-off in U.S. assets and raising concerns about a “confidence crisis” in the world’s reserve currency.

Former Treasury Secretary Janet Yellen described the simultaneous drop in U.S. stocks, bonds, and the dollar as “paralysing uncertainty.”

Analysts warn that investors should not assume the dollar will always rebound, as the shift toward a system of multiple influential currencies is underway.

“Dollar dominance isn’t over—but it’s being critically diluted. Those who act early will be best placed to capitalise on the next phase of global finance,” Green concluded.