The U.S. Dollar Index (DXY) has experienced its steepest decline in over five decades, falling more than 10.8% in the first half of 2025. This marks the worst first-half performance since 1973, the year the Bretton Woods gold-backed system ended. The index dropped below 97 for the first time since March 2022 and reached levels not seen since February 2022, hitting as low as 96.37 and 96.455 in early July. The decline reflects waning investor confidence amid erratic policy shifts, concerns over rising U.S. debt, and trade policies under President Donald Trump, including tariffs that have prompted global investors to reconsider their exposure to the dollar. Institutional sentiment is notably bearish, with a Bank of America survey indicating that a net 32% of fund managers are underweight on the U.S. dollar, the largest share in 20 years. The dollar's poor performance is the weakest six-month showing since 2009, with major dollar indexes such as the ICE Dollar Index down over 10% and the WSJ Dollar Index down 8%. Despite some easing of tariff threats and a recovering U.S. stock market, the dollar continues to weaken, and analysts, including Morgan Stanley, predict the dollar could fall another 10% before the year ends. The U.S. Dollar Index is now trading below its 200-day moving average by the largest margin in 21 years, underscoring the currency's ongoing vulnerability.