The dollar drops to its lowest level in three years!

While Wall Street is going on records, the dollar has collapsed at an unprecedented rate since 1973. This big gap is not trivial. It reflects a global tilting powered by geopolitical tensions, a federal reserve under political pressure, and macroeconomic uncertainties. The benchmarks are crumbling, the markets are looking for shelters. In this silent, but brutal recomposition, the cryptos are again imposed in the strategic field, carried by their decentralized logic in the face of the instability of state currencies.

Wall Street flies away, worn by tech and a geopolitical start

Despite the fragility of the markets in the face of economic uncertainty, the S&P 500 increased by 0.80 % to 6,141.02 pointsa spectacular flight of more than 23 % from its low April point, at the end this Thursday, June 26. The NASDAQ jumped 0.97 % to 20,167.91 points, while the Dow Jones gained 0.94 % to 43,386.84.

This recovery, which began in an extreme uncertainty context, has accelerated thanks to unexpected diplomatic relaxation in the Middle East. A ceasefire between Israel and Iran was announced after almost two weeks of military tensions, under the aegis of American mediation.

In the wake of this appeasement, the markets have regained a pronounced appetite for the risk. Traders rush on technology, growth actions and the most risky segments on the market, hoped by President Trump will adopt a more moderate posture on the commercial front.

In addition to the equity indices, other economic indicators have also reacted to this more favorable situation. We observe in particular:

• A resumption of oil prices, with the Brent which ended at 67.73 Dollars per barrel (+0.07 %) and WTI at 65.24 dollars (+0.49 %), carried by the prospect of nuclear negotiations with Iran;

• A revival of global optimism, the European markets also recording increases, like the pan -European stoxx index (+0.09 %), and the MSCI index of the global markets reaching a new record at 909.47 points;

• A growing bet on commercial appeasement, investors anticipating a partial decline in American tariff threats, pending scheduled talks with several international partners before the July 9 deadline.

These movements reflect a rapid repositioning of operators, who see in this geopolitical lull an opportunity to re -expose risked assets. However, this excitement is based on still fragile fundamentals: neither the Iranian file nor trade tensions are really settled. The risk of reversal therefore remains very present.

Dollar tumble and questioning of the Fed

If the spotlights focus on the stock market outbreak, another movement, more discreet, but potentially heavy with consequences, is at work: the collapse of the dollar.

The Dxy indexwhich measures the greenback against a basket of major currencies, lost 0.43 % over the day and now drops by more than 10 % since the start of the year. If this trend continues, it will be the worst first half of the dollar since the establishment of floating exchange rates in the early 1970s.

The context of this drop is anything but trivial. President Trump would plan to replace Jerome Powell, current president of the Federal Reserve, before the end of his mandate scheduled for next May. Such a scenario would directly question the independence of the American central bank, a fundamental principle in the eyes of international investors.

Wasif Latif, director of investments at Sarmaya Partners, summary The situation: “The market recognizes that, sooner or later, Powell will leave the scene and his successor will probably be more accommodating, even politically aligned”.

The prospect of a more conciliatory president of the Fed, that is to say favorable to faster rate reductions, fuels the anticipations of monetary relaxation. Bond rates already reflect this dynamic: the yield of American 10 years fell to 4.248 %, its lowest level in seven weeks, and that of 2 years fell to 3.721 %.

This drop in returns, combined with loss of confidence in the dollar, encourages certain investors to reposition themselves on refuge values ​​such as bitcoin or gold, whose term contracts are treated at $ 3,348 per ounce.

The impact of this shift in the cryptos market could be considerable. If doubt settles permanently around the credibility of the Fed in particular on a dismissal of Powell, decentralized assets like Bitcoin could regain their attraction as a monetary alternative. Recent history has shown that periods of dollar drop coupled at negative real rates are a fertile ground for cryptos.