(Bloomberg) — The dollar (DX=F) has wiped out all of its gains since Donald Trump won the presidency in November as a new wave of tariffs upended global markets.

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The Bloomberg Dollar Spot Index fell to around its lowest since mid-October on Friday — levels seen just before the results of the US election on Nov. 5. The world’s reserve currency plunged along with US bond yields and US equities on fears that Trump’s trade war will slow economic growth. All of the dollar’s Group-of-10 peers — led by the Japanese yen and Swiss franc — rallied on tariff announcement day Thursday as traders sought havens.

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“The dollar bear market has arrived and is roaring,” said Paresh Upadhyaya, director of fixed income and currency strategy at Amundi, US, adding that the gauge could fall 10% this year as the US is “teetering on the edge of recession.”

The $7.5 trillion a day foreign-exchange market had been on edge leading up to Trump’s April 2 tariff announcement, with a few false starts on levies muddying the outlook. Trump’s push to roll back decades of globalization and subsequent measures have led investors to bet against the dollar.

That’s in stark contrast to earlier this year when Trump’s policy plans — such as tax cuts and tariffs — were seen as a reason to bet on a rally in the dollar. In February, US Treasury Secretary Scott Bessent said that Trump’s policies were “completely intact” with strong dollar, confirming the administration strong dollar stance.

The dollar gauge had rallied about 5% after Trump’s election, peaking earlier this year before slumping more than 4% in 2025. It dropped 1.5% on Thursday and traded about 0.4% lower in Asia trading on Friday.

“We may be at the very early stages of a structural selloff in the dollar,” said Ed Al-Hussainy, a strategist at Columbia Threadneedle Investment.

The last 24 hours have been a “profound galvanizing structural moment” for currency markets, according to Richard Franulovich, head of FX strategy at Westpac Banking Corp. Trump’s policy agenda including tariffs and budget cuts have rewired the dollar’s relationship with equity risk, he wrote in a note to clients.

“The famed ‘USD smile’ no longer exists - it’s more of a ‘USD sneer,”’ he said.

Economy Key

For Paul Mackel, global head of currency research at HSBC, what’s key for the greenback is investor expectations about the outlook for the US economy.

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“We know where the risk to the dollar lies – lower – if the view of a US slowdown alone persists,” he said.

Data out of the US have been pointing to a slowdown in growth and a gradually cooling labor market, pushing speculative traders to turn bearish on the dollar for the first time since before Trump’s election, according to Commodity Futures Trading Commission data.

The next test comes Friday with the US labor-market report, which is expected to show job growth cooled in March.

“The blowback of US tariffs onto the US domestic economy leaves the dollar naked,” said Chris Turner, head of currency strategy at ING. “US rates continue to be marked lower, and not until we get some surprisingly good news from the US on tax cuts or deregulation may the dollar start to find some support.”

—With assistance from Augusta Saraiva, Matthew Burgess and Ruth Carson.

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