"We are becoming increasingly concerned that the dollar is at risk of a broader confidence crisis," Deutsche Bank wrote.

Summary

The US dollar plunged 2.16% Thursday to its lowest level since October amid concerns of a “confidence crisis” triggered by Trump’s new tariffs.

Deutsche Bank warns the dollar’s decline stems from damaged policy credibility, weakened growth expectations, and potential capital flight from US markets.

The trade war has increased rate-cut expectations rather than supporting the dollar through inflation.

Treasury Secretary Bessent’s focus on fiscal tightening has further undermined confidence, while the 10-year Treasury yield dropped significantly to 4.027%.