The Federal Reserve Bank of New York announced that neither the Federal Reserve nor the U.S. Treasury intervened in foreign exchange markets during the second quarter of 2025. This information was shared in the bank’s quarterly report to Congress.
According to the report, the U.S. dollar experienced a decline during this period. The broad trade-weighted dollar index from the Federal Reserve Board showed a depreciation of 5.6 percent for the quarter and a total drop of 7.5 percent since January 2025.
Market analysts indicated that part of this depreciation resulted from revised projections for U.S. economic growth compared to other countries, following new reciprocal tariffs imposed on U.S. trading partners. There was also increased uncertainty among market participants, which led foreign investors to raise their FX hedge ratios on U.S. dollar assets from previously low levels.
During the second quarter, the dollar weakened against all advanced-economy currencies and most emerging-market currencies. Specifically, it dropped 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 quarterly report can be accessed through the New York Fed’s website.
For further information, contact Connor Munsch at (347) 224-1175 or Connor.Munsch@ny.frb.org.
