Core Viewpoint - The article discusses the significant decline of the US dollar, highlighting that it has experienced its worst first half since the early 1970s, with a nearly 11% drop in the ICE dollar index in the first six months of 2025, raising concerns about a potential long-term depreciation cycle for the dollar [2][5]. Group 1: Factors Contributing to Dollar Weakness - **Increased Foreign Exchange Hedging Demand**: Following the 2008 financial crisis, foreign investors had minimal need to hedge currency risks due to the strong performance of the US stock market. However, recent strong performances in international markets and uncertainties surrounding trade policies have led to a rise in hedging demand, contributing to the dollar's decline [8][9]. - **Anticipation of Federal Reserve Rate Cuts**: The expectation of potential interest rate cuts by the Federal Reserve, as indicated by market tools, adds downward pressure on the dollar. Many analysts believe that the Fed has more room to cut rates compared to other major central banks, which could further weaken the dollar [10][12]. - **De Facto Weak Dollar Policy**: The current US administration's policies appear to align with a "de facto weak dollar policy," which may enhance the competitiveness of US exports. This could benefit large US companies with significant overseas revenues, as a weaker dollar may lead to increased profitability [13].