Dollar's crown is slipping due to rapidly changing US trade policies

The dollar has sunk to its lowest in three years as rapidly changing US trade policy unsettles markets and expectations build for Federal Reserve rate cuts, fuelling outflows from the world's biggest economy.

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While the dollar was higher on Friday, lifted by safe haven flows as Israel launched a strike on Iran, it was still set for its biggest weekly drop in a month.

It is also down almost 10% against a basket of major currencies this year, leaving other countries grappling with unanticipated FX moves that are having a knock-on impact on economic growth and inflation.

"There's clearly solid dollar selling," said Kit Juckes, chief FX strategist at Societe Generale.

Here's a look at some of the biggest movers: I/ CROWN JEWELS Scandinavia's currencies are the standout performers against the dollar so far in 2025. The Swedish crown is up 15%, its best performance at this point in the year against the US currency in at least 50 years. Norway's crown is up 13%, its best run since 2008.