The US dollar is heading towards its largest annual decline since 2017. The options market indicates that there is still further downside potential.

The US dollar is heading towards its weakest annual performance in eight years, with options markets showing traders preparing for further declines in the last few trading days of 2025. The Bloomberg Dollar Spot Index fell 0.3% on Tuesday to its lowest level since October 3. The index has already dropped 8.2% this year, on track for its biggest decline since 2017. If there is another modest decline, the dollar will face its worst annual performance in at least twenty years.