The US Dollar index recorded its sharpest one-day fall since April last year, when President Donald Trump’s tariff-related comments unsettled markets, slipping to levels last seen in February 2022. Trump remarked that he preferred the currency to find its own natural level, calling it a fair approach, but also suggested he had the ability to influence its direction. “I could make it rise or fall like a yo-yo,” he said, implying possible intervention.
The decline in the Dollar on Tuesday occurred despite factors that typically support the currency, including rising government bond yields and strong expectations that the Federal Open Market Committee would keep policy unchanged. These normally provide strength to the greenback, making the fall more notable.
Trump has long supported a weaker Dollar, arguing that several countries, particularly China and Japan, have deliberately weakened their currencies. He believes a softer Dollar would help improve US export competitiveness and reduce the trade deficit. Recalling past disputes, Trump said he frequently challenged these nations over repeated currency devaluations, claiming it made competition unfair. According to him, despite his objections, those countries continued to defend their currency policies while benefiting from weaker exchange rates.
