Traders are betting big that the US dollar will continue to fall amid uncertainty about Washington’s political and economic policies, Bloomberg has reported.
The dollar suffered its worst single-day decline in nearly a year on Tuesday, plunging to its lowest level since February 2022. The fall was part of a broader downtrend that began after US President Donald Trump launched sweeping global tariffs early last year. The resulting trade frictions, as well as expectations of Federal Reserve rate cuts and rising deficits and debt have been undermining confidence in the currency.
“US policy volatility is now debasing the dollar,” said Luis Costa, Citi’s head of emerging markets strategy. “This… is prompting a market reshuffle into dollar shorts.”
Bloomberg said options that profit from a falling dollar are now the most expensive since 2011, as traders use them as insurance against a drop. Markets are also more negative on the dollar’s long-term outlook than at any point since May 2025, the outlet noted. Rising investor anxiety is pushing up hedging costs, with short-term dollar volatility at its highest since September and demand for protection against large swings climbing, signaling traders expect further losses.
This is honestly embarrassing.
Just a horrible take. I don’t know where to begin. pic.twitter.com/oPH2l6P5El
— QE Infinity (@StealthQE4) January 29, 2026
Gold & Silver Prices Could Skyrocket Soon! | US Dollar Breakdown & Impact on Markets