Dollar falls to four-year low, Trump says it’s great for business

The dollar hit its lowest level since early 2022 on January 28 after US President Donald Trump described the depreciation of the US currency as a “great” result for business.

The spot dollar index fell 1.2%, leading to a strengthening of the yen, euro and pound, Bloomberg reported.

“No, I think it’s great. I think the business that we do is doing great,” Trump told reporters in Iowa on Tuesday when asked if he was worried about the currency’s decline.

Trump’s comments deepened the dollar’s deepest drop since he imposed tariffs last year, triggering a market rout and concerns that his unpredictable policy decisions will cause foreign investors to avoid investing in the United States.

The US president has long accused other countries of trying to devalue their currencies to boost exports, while Treasury Secretary Scott Bessant has stressed the difference between the dollar’s ​​price and its value as a reserve currency. That’s why Trump’s latest comments were seen as a signal for traders to sell the US currency.

The dollar’s ​​decline was partly due to the yen’s sharp recovery last week, as traders anticipated possible intervention by Japanese officials to support the national currency.

At the same time, the dollar’s ​​weakness was exacerbated by Trump’s unpredictable policies that have caused concern among foreign allies and investors: his threats to seize Greenland, pressure on the Federal Reserve, tax cuts that have deepened the deficit, and a leadership style that has exacerbated political polarization in the US.

The dollar’s weakness comes despite rising Treasury yields and expectations that the Fed will pause interest rate cuts at its meeting on Wednesday – both factors are typically seen as supportive for the currency.