By Marc Jones

LONDON (Reuters) -After U.S. President Donald Trump's radical campaign pledges, investors knew markets would get bumpy this year as he returned to lead the world's biggest economy. But almost nobody predicted the outcome so far, especially the dollar's dramatic fall.

Run through the year's numbers without tracking the journey and many key markets look serene.

World stocks are at record highs, benchmark global borrowing costs are down and so-called market "fear gauges" like the VIX barely look like they have moved.

But look closer and the turmoil is clear: all of those markets have seen extreme swings over the last six months - and then there's the dollar.

The world's reserve currency is down over 10%. That's its biggest first-half dive since the era of free-floating currencies began in the early 1970s, whereas gold is up 25% in its biggest rise since then, which marked the end of the bullion-linked Bretton Woods System.

Vincent Mortier, chief investment officer at Europe's largest asset manager Amundi, puts this down to Trump's trade war, and particularly to what the president calls his "Big Beautiful" fiscal bill that will keep the U.S. deficit at 6-7% and its $36.2-trillion debt pile ballooning.

"The big event of the first half for the market has been this U.S. weakness and this questioning of what should be the trajectory of the dollar," Mortier said, adding he expected the U.S. currency to keep dropping, albeit more slowly.

Also eye-catching have been the struggles of the "Magnificent Seven" tech giants. They have been a cash cow for portfolios for years, but have been left for dust so far this year by a 20% rally in Chinese rivals and a near 70% surge in European weapons makers.

The latter move has been driven by Trump too. His signal that the U.S. will scale back Europe's military protection is forcing the region - and other NATO members - to rearm.

Germany's historic plan to revamp its self-imposed debt brake to allow higher defence spending initially interested the $140 trillion global bond market, although long-term U.S. debt concerns and record-high Japanese borrowing costs have driven most moves since.

Given the dollar's woes, benchmark U.S. debt will have lost money this year for most who sit outside the country.

Highlighting the volatility, 30-year Treasury yields surged past 5.1% to their highest since 2007 in May, but are already back at 4.8%. Switzerland, meanwhile, took its interest rates back down to zero this month.

GREAT ROTATION?

The dollar's slump also means the euro is up 12.5%, Japan's yen is up nearly 8% and the Swiss franc is up 13.5%. It has also given emerging markets a chance to shine.

Trump's re-engagement with Russian President Vladimir Putin has helped the rouble surge a whopping 40%, although it remains heavily restricted by Western sanctions and still lags the 42% tear in gold producer Ghana's cedi.

In eastern Europe, Poland's zloty, the Czech crown and Hungarian forint are all between 13-17% stronger. Taiwan's dollar jumped 8% in just two days last month and even Mexico's peso and emerging market local currency debt are enjoying double-digit gains for the year, despite all the trade war trauma.

"This is the most prominent capital rotation we have seen for the best part of two decades," said PIMCO's head of emerging market portfolio management, Pramol Dhawan, referring to the move out of U.S. assets into emerging and other markets.

"And we still think we are in the early innings of this."

At the bottom of the FX pile are familiar names like Argentina's peso and Turkey's lira. The latter is down nearly 11% and much of that happened after Turkish President Tayyip Erdogan's main political rival was detained back in March.

Bitcoin has been volatile, as usual. It raced up almost 20% when Trump took office, dived nearly 30% when his plans for a U.S. cryptocurrency reserve failed to impress and has spent the last three months clawing it all back again.

Oil has yo-yoed too. It slumped 30% to below $60 a barrel in April after Trump's sweeping tariff plan fuelled global recession fears, but briefly soared above $80 this month when Israel and the U.S. bombed Iran.

GOOD AS GOLD

Copper has defied the global economy worries to jump 11%, although it's the precious metals that have sparkled. Silver is neck-and-neck with gold, up 24%, while platinum is up nearly 50% after a string of 10-year highs.

There won't be much time for a second-half breather either. Trump wants to ram his "Big Beautiful Bill" though U.S. Congress by July 4's Independence Day holiday, while his ceasefire in the global trade war runs out five days later.

Things are already kicking off with neighbour Canada and as the deadline approaches - and with scant progress so far towards mutually-agreed baseline levies - questions remain how long markets can stay numb to the risks.

(Additional reporting by Yoruk Bahceli. Editing by Amanda Cooper and Mark Potter)