Analysts have begun to show concern about the depreciation of the dollar in recent days. Investors have sold greenbacks, driving the world’s top currency to its lowest level in four years. But Donald Trump, the president of the United States, does not seem concerned about this movement that threatens to affect the world’s largest economy. “Look at the value of the dollar. Look at the business we are doing. The dollar is, the dollar is very good,” said the president of the United States in Des Moines, the capital of Iowa, where this Tuesday he gave a speech about how well the economy is doing. The president’s statements accelerated sales and accentuated the fall in the price of the dollar. One euro is now equivalent to $1.20, which makes imports even more expensive for Americans and cheaper for Europeans.
The dollar fell 1.3% against other major currencies, leaving its price at the lowest level since March 2022 and 2.6% below since early 2026, Bloomberg reported. The volatility of the White House’s foreign policy, such as the case of the attempt to annex Greenland against the will of its European allies; The unexpected unity of the EU countries against this maneuver by Washington, the high debt and the uncontrollable public deficit and the tensions over the Japanese yen, which threatens to force coordinated action by the US monetary authorities to avoid greater evils, explain the strong depreciation of the dollar since last week.
The uncertainty generated by Trump on trade matters, threatening his main partners with tariffs – this week he said he will impose 100% trade levies on Canada if it negotiates with China -, the uncertainty of his fiscal policy, with the Big and Beautiful Act, which grants huge tax breaks to companies, has made some investors want to limit their exposure to assets such as the dollar. And that has benefited European currencies, such as the pound sterling, which reached $1.38.
Meanwhile, changing to 153 units for each US bill. Gold, for its part, remains in the high zone and is heading towards $5,100 per ounce.
Behind the depreciation of the green currency also lies investor concern about the White House campaign to raid the Federal Reserve. Since taking his seat in the Oval Office for his second term, Trump launched a campaign of harassment against Jerome Powell to cut interest rates more aggressively or resign. The risks of the Fed’s loss of independence worry the market, which believes that it could unleash an inflationary crisis in the medium term if Trump’s theses prevail.
The dollar’s recent decline has come despite rising government bond yields and expectations that the Fed is about to pause its interest rate cuts at Wednesday’s meeting, factors that would traditionally have been considered favorable for the currency, analysts tell Bloomberg.
Despite the nervousness in the market, Trump appears calm. On the one hand, he has always advocated a weaker dollar to boost American exports and make American-made products more competitive abroad. Furthermore, that would help reduce the trade deficit.
That’s why Trump suggested he could manipulate the strength of the dollar: “I could make it go up or down like a yo-yo.”
“If you look at China and Japan, I used to fight them to the death, because they always wanted to devalue the yen. You know, the yen and the yuan, and they always wanted to devalue them. They devalued, devalued, devalued,” Trump said Tuesday. The president criticized Asian countries that, according to him, tried to devalue their currencies. “It is not fair that they devalue, because it is difficult to compete when they devalue. But they always fought, no, our dollar is great,” he added.
