In June 2025, the global financial market is undergoing a historic transformation. The chaotic tariff policies and indecisive decisions of the U.S. government are pushing the dollar into a dangerous situation.

Financial data shows that the US dollar index has sharply declined from 109 at the beginning of the year to 99 in early June, marking the most severe drop in forty years. This dollar crisis, stemming from uncertainties surrounding tariffs, is reshaping the global distribution of wealth.

The dilemma facing the US dollar arises from two major factors: on one hand, the expectation of interest rate cuts by the Federal Reserve continues to heat up, directly weakening the market appeal of the dollar. The market generally anticipates a 50 basis point rate cut within the year, while Morgan Stanley analysts predict that the cumulative rate cut in the next 12 months may reach 175 basis points, which means that an oversupply of dollar liquidity will become a reality. On the other hand, the tariff war initiated on April 2 has led to a significant reduction in US imports and a severe impact on supply chains, with the ISM services index falling to 49.9 in May, below the expansion-contraction line, significantly increasing the risk of stagflation. The International Monetary Fund has issued a warning that if the current tariff policies are maintained, the US GDP growth rate could drop to 1.8% by 2025.

In 2025, the financial market experienced a rare "triple kill" phenomenon—U.S. stocks, U.S. bonds, and the U.S. dollar all plummeted simultaneously, exposing the fragility of the U.S. financial system. Moody's has downgraded the U.S. sovereign credit rating, and the $36.2 trillion debt burden has led investors to sell off dollar assets. An analysis report by UBS shows that high-net-worth clients are heavily purchasing gold, Bitcoin, and renminbi assets as hedges, resulting in gold prices soaring to $3,300 per ounce and Bitcoin prices breaking the $110,000 mark.

At the same time, the euro is gradually replacing the US dollar as the new safe-haven currency, thanks to the European Central Bank's hawkish stance and digital sovereignty strategy, with its exchange rate against the dollar reaching a seven-week high. The Asian currency market is also active, with the South Korean won and New Taiwan dollar appreciating more than 4% within a single month.

These signs collectively indicate that the global financial system is undergoing a profound transformation, facing unprecedented challenges to the long-standing dominance of the US dollar.