(Bloomberg) -- The dollar has emerged as the latest victim of this week’s market turmoil as a worsening global trade war risks derailing US economic growth.

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A Bloomberg gauge of the greenback tumbled to a fresh six-month low Friday after China raised tariffs on all US goods from 84% to 125% with effect from April 12. The index kept its losses as US wholesale prices fell in March by the most since 2023, showing tame inflation ahead of higher tariffs. Options traders turned bearish for the first time in five years as part of a broader exodus from US assets as trade tensions between the world’s two largest economies intensified.

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Havens such as the yen, Swiss franc and gold benefited from the outflows. The euro rose to its strongest in three years, heading for its biggest two-day advance since 2009.

“Dollar confidence is under threat,” said Christopher Wong, a foreign-exchange strategist at Oversea-Chinese Banking Corp. Doubts are growing about the greenback’s status as a reserve currency due to factors including fading US exceptionalism and ballooning US debt, he added.

Traders are not only losing confidence in the dollar’s long-term prospects — they’re doing so at the fastest pace on record. One-year risk reversals, a key gauge of demand for upside versus downside exposure in the greenback against major peers, have flipped in favor of dollar downside for the first time in five years.

A Z-score analysis — which measures how far current pricing deviates from historical norms — shows that the speed and magnitude of the shift toward bearish dollar positioning is not only significant, but the most extreme on record. It underscores the scale of the sentiment reversal, suggesting traders are rapidly recalibrating long-held assumptions about the greenback’s role as a haven and store of value.

Friday’s price action rounds off yet another turbulent week for global markets as President Donald Trump’s fast-evolving trade policy leaves investors struggling to figure out their next move. The dollar recorded its biggest plunge in over two years on Thursday amid growing expectations that the Federal Reserve will have to lower borrowing costs to counter the contractionary impact of US tariffs.