U.S. dollar’s value and recent trends - Gradual Slump

5th September 2025

The U.S. Dollar Index (broad, trade-weighted) stood at approximately 120.6 as of August 29, 2025, reflecting a slight decline from previous days—this indicates modest weakening in the dollar’s value against a basket of global currencie.s

Against major currencies:
The dollar is down about 3.13% over the past year and down roughly 0.15% in the last month.

Dollar vs. British Pound

Year-to-date in 2025, the GBP/USD rate has risen by approximately 7.3–7.4%, signalling a stronger pound relative to the dollar
Exchange Rates
Pound Sterling Live
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Rate highlights:

Highest point: around 1.3743–1.3789 USD per GBP, reached on July 1, 2025
Pound Sterling Live
Exchange Rates
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Lowest point: near 1.2168–1.2177 USD, in mid January 2025

2025 average: approximately 1.311 USD per GBP
Pound Sterling Live

Monthly average:
January: ~1.235
June: ~1.355
August: ~1.345
Early September: around 1.347

As of September 5, 2025, pound is trading at £1 ≈ $1.355.

What's Driving These Trends?

Monetary policy divergence: Markets anticipate potential rate cuts in the U.S., while UK yields remain relatively attractive—making GBP a more appealing carry trade.

Economic momentum: In late August, the UK’s services sector posted a strong performance, supporting sterling’s strength

Global shifts: The dollar is facing structural pressures from “de-dollarization” trends—some countries are reducing reliance on it as a reserve currency.

Long-term concerns: Analysts such as David Roche warn the dollar may slide 15–20% over the next 5–10 years, citing trade tensions and weakening investor confidence.

The U.S. dollar is in a gradual slump, both in trade-weighted terms and versus the British pound. The pound has strengthened through mid-2025, and unless U.S. policy surprises markets, the USD may continue to lose ground—though global events and central bank actions could quickly shift dynamics.