The U.S. dollar fell to a four-year low against a basket of major currencies after President Donald Trump downplayed concerns about the currency’s decline, calling its value “great” and signalling tolerance for further weakness.
The greenback extended recent losses on Tuesday after Trump made the remarks to reporters in Iowa ahead of an economic-focused speech aimed at energising rural voters in a politically crucial state. His comments reinforced market expectations that the administration is comfortable with a softer dollar.
Analysts said the remarks added momentum to an already weakening currency. “The market is happy to give it to them,” said Marc Chandler, Chief Market Strategist at Bannockburn Capital Markets, noting that Trump’s stance suggests a preference for a weaker dollar to support trade and growth.
The dollar has been under pressure in recent sessions as investors brace for the possibility of coordinated currency intervention by U.S. and Japanese authorities. Broader concerns over U.S. economic policy, including questions around Federal Reserve independence, have also weighed on sentiment.
Political uncertainty is adding to the pressure. Fresh tensions between Republicans and Democrats over funding for the Department of Homeland Security have revived fears of another U.S. government shutdown, unsettling markets.
Trade policy risks are further amplifying volatility. Trump has accused South Korea of failing to uphold its trade commitments and threatened to raise tariffs on key imports—including automobiles, lumber, and pharmaceuticals—to 25%. He has also warned of imposing a 100% tariff on Canada if it proceeds with a trade agreement with China.
“We’ve already seen sizable moves in recent days,” Chandler said. “Trump’s comments on the dollar effectively poured gasoline on an existing fire.”
Together, policy uncertainty, trade tensions, and a tolerant stance on currency weakness are driving the dollar to multi-year lows.
