The dollar has steadied after the worst start to the year since 1973, as the resilience of the US economy prompts some investors to back away from bearish bets on the currency.

The dollar index — a gauge of the currency’s strength against major rivals — tumbled in the first half of the year as concerns that Donald Trump’s trade war would hurt growth combined with jitters over rapidly mounting sovereign debt.

But it has risen 1.6 per cent so far this month — putting it on course for its first monthly gain of 2025 — as a run of strong economic data casts doubt on the case for further interest rate cuts from the US Federal Reserve. The dollar has clung on to those gains despite a brief slump following reports that the president was considering sacking Fed chair Jay Powell.