The Federal Reserve Bank of New York reported that neither the Federal Reserve nor the U.S. Treasury took action in foreign exchange markets during the second quarter of 2025. The quarterly report to Congress stated there was no intervention between April and June.
According to the report, the U.S. dollar experienced a 5.6 percent decline during this period, based on the Federal Reserve Board’s broad trade-weighted dollar index. Since the beginning of 2025, this marks a total depreciation of 7.5 percent for the currency.
Market sources indicated that this depreciation resulted partly from downward adjustments in U.S. economic growth forecasts compared to other countries, following new reciprocal tariffs imposed on U.S. trading partners. Additionally, investors responded to increased uncertainty by raising their foreign exchange hedge ratios on dollar assets, which contributed further to the currency’s decline.
During the quarter, the dollar lost value against all advanced-economy currencies and most emerging-market currencies. Specifically, it fell by 8.2 percent against the euro and by 4 percent against the Japanese yen.
Roberto Perli, manager for the System Open Market Account at the Federal Open Market Committee, presented these findings on behalf of both the Treasury and Federal Reserve System.
The full report is available through the New York Fed’s website.
For further information, contact Connor Munsch at (347) 224-1175 or Connor.Munsch@ny.frb.org.
