The dollar (CCOM:DXY) slumped on Thursday morning, dropping 2.1% against a basket of trading partners’ curriencies. This puts it on track for its worst day since 2022.

The fall has been caused by fears of lower growth following the sweeping tariffs that President Trump has levied against multiple countries.

Franceso Pesole, an FX strategist at ING, said, “Investors are sinking their teeth into the dollar, on the narrative that tariffs will asymmetrically damage the US economy.” He added that while some of the tariff impact on others could be negotiated away, there was a risk that the US was “left with little revenue and only the backlash of higher uncertainty and weaker consumer sentiment.”

The US dollar sell0ff is accelerating and heading to a new six-month low, as the consequences of Trump’s ‘Liberation Day’ sink in.

Even if some of the new tariffs might be cancelled or reduced in coming days, uncertainty remains high, and some estimates suggest the economic impact could be even greater than the Smoot-Hawley tariffs of the 1930s, which raised import taxes and are widely believed to have made the Great Depression worse.

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