The Federal Reserve Bank of New York reported that neither the Federal Reserve nor the U.S. Treasury intervened in foreign exchange markets during the second quarter of 2025. This information was included in the institution’s quarterly report to Congress.
During this period, the U.S. dollar experienced a 5.6 percent depreciation according to the Federal Reserve Board’s broad trade-weighted dollar index. Since the start of 2025, the cumulative depreciation reached 7.5 percent. Market sources attributed part of this decline to downward revisions in U.S. economic growth projections compared to other countries, which followed announcements about reciprocal tariffs involving U.S. trading partners.
Additionally, market participants noted that increased uncertainty led foreign investors to raise their FX hedge ratios on U.S. dollar assets from historically low levels, contributing further to the dollar’s overall decline.
In bilateral terms, the dollar fell by 8.2 percent against the euro and by 4 percent against the Japanese yen during this quarter. The currency also depreciated against all advanced-economy currencies and most emerging-market currencies over this timeframe.
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 can be accessed through the New York Fed’s website.
