Trump assures that he’s not nervous in regards to the fall of the greenback: “It’s going very well, look at the business we are doing” | Economy | EUROtoday

Analysts have begun to point out concern in regards to the depreciation of the greenback in latest days. Investors have offered dollars, driving the world’s prime forex to its lowest stage in 4 years. But Donald Trump, the president of the United States, doesn’t appear involved about this motion that threatens to have an effect on the world’s largest financial system. “Look at the value of the dollar. Look at the business we are doing. The dollar is, the dollar is very good,” mentioned the president of the United States in Des Moines, the capital of Iowa, the place this Tuesday he gave a speech about how properly the financial system is doing. The president’s statements accelerated gross sales and accentuated the autumn within the value of the greenback. One euro is now equal to $1.20, which makes imports much more costly for Americans and cheaper for Europeans.

The greenback fell 1.3% towards different main currencies, leaving its value on the lowest stage since March 2022 and a pair of.6% under since early 2026, Bloomberg reported. The volatility of the White House’s overseas coverage, such because the case of the try to annex Greenland towards the desire of its European allies; The sudden unity of the EU international locations towards this maneuver by Washington, the excessive debt and the uncontrollable public deficit and the tensions over the Japanese yen, which threatens to drive coordinated motion by the US financial authorities to keep away from larger evils, clarify the sturdy depreciation of the greenback since final week.

The uncertainty generated by Trump on commerce issues, threatening with tariffs on his most important companions – this week he mentioned he’ll impose 100% commerce levies on Canada if it negotiates with China -, the uncertainty of his fiscal coverage, with the Big and Beautiful Law, which grants monumental tax breaks to firms, has made some traders wish to restrict their publicity to belongings such because the greenback. And that has benefited European currencies, such because the euro, which is near $1.20, ranges not seen since June 2021, and the pound sterling, which reached $1.38.

Meanwhile, the yen weakens towards the greenback, altering to 153 items for every US invoice. Gold, for its half, stays within the excessive zone and is heading in the direction of $5,100 per ounce. “There is speculation about coordinated action in support of the yen, which has specifically helped that currency. The deterioration of the United States’ international position and recent domestic events may be eroding some of the supposed support for the dollar’s reserve status,” says UBS analyst Paul Donovan.

Behind the depreciation of the inexperienced forex additionally lies investor concern in regards to the White House marketing campaign to raid the Federal Reserve. Since taking his seat within the Oval Office for his second time period, Trump launched a marketing campaign of harassment towards Jerome Powell to chop rates of interest extra aggressively or resign. The dangers of the Fed’s lack of independence fear the market, which believes that it may unleash an inflationary disaster within the medium time period if Trump’s theses prevail.

“The renewed attacks on the Fed’s independence, amid the subpoenas to Chairman Powell, continue to weigh on the US dollar,” explains Thomas Hempell, analyst at Generali AM. “Concerns about the reliability of the US as a geopolitical partner, amid Trump’s threats to seize Greenland from a close NATO ally (before later conceding in Davos), have further hit the dollar. However, in real effective terms, the dollar remains expensive. Another rate cut by the Fed this year will further erode the advantage of US yields,” Hempell continues.

The greenback’s latest decline has come regardless of rising authorities bond yields and expectations that the Fed is about to pause its rate of interest cuts at Wednesday’s assembly, elements that may historically have been thought of favorable for the forex, analysts inform Bloomberg.

Despite the nervousness out there, Trump seems calm. On the one hand, he has at all times advocated a weaker greenback to spice up American exports and make American-made merchandise extra aggressive overseas. Furthermore, that may assist cut back the commerce deficit.

That’s why Trump steered he may manipulate the energy of the greenback: “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 mentioned Tuesday. The president criticized Asian international locations that he mentioned 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.

Enguerrand Artaz, strategist at La Financière de l’Échiquier, explains it as follows: “Since the mid-1990s, bonds issued by the US government have become the most used reserve asset in the world, dethroning the one that reigned until then: gold. Paradoxically, that crown they have held was owed above all to Europe. While US debt gradually gained presence in reserve assets, the peso gold prices were declining rapidly and European central banks were selling – sometimes en masse – their gold reserves to prepare for the advent of the euro.

Artaz, who recalls how American debt is massively in the hands of foreign investors, especially Chinese and Japanese. And how gold has skyrocketed its value to historical records. Last week it reached $5,000 per ounce, the highest value in its history.

“Adding all of the devices, the greenback continues to be the world’s main reserve asset and, even when gold have been to dethrone it, it could proceed to be a reference. On the opposite, the US debt market may change into a geopolitical battlefield. That would make it potential for gold to proceed shining,” concludes Artaz.