Strong U.S. Dollar: Likely The Biggest Surprise In H2

Jul. 08, 2025 11:22 AM ETUS Dollar Index (DXY), SPY, DIA, QQQ, IVV, VOO, IWM, SPX, SP500, NDX, DJI, , , , , , , , , , , , , 27 Comments
Damir Tokic
12.01K Followers

Summary

  • The longer term case for USD depreciation is very strong; however, the U.S. dollar could surprise and appreciate in the second half of 2025.
  • Specifically, the re-establishment of reciprocal tariffs is likely to cause a global recession, which benefits the U.S. dollar.
  • More broadly, a stronger USD will signal a risk-off environment, which is negative for the stock market.

A close-up of a part of a $1 bill. View from above. One US dollar. The American national currency. Economics and finance. Cash banknotes.

chekat

Tariffs Benefit USD

The 90-day window to negotiate the trade deals is expiring on July 9th. The Trump administration has started sending the letters to all countries informing them about their respective tariffs, although these tariffs become effective on August

This article was written by

12.01K Followers
Commodity Trading Adviser (CTA), member of National Futures Association. Professor of Finance, research on Global-macro issues. Editor-in-Chief, Journal of Corporate Accounting and Finance.

Analyst’s Disclosure:I/we have a beneficial short position in the shares of SPX either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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