Trump Relaxes, Dollar Weakens Even More
The US dollar came under increasing pressure and briefly fell to its weakest level since early 2022, after President Donald Trump asserted he was not concerned about the currency's weakening while speaking to reporters in Iowa.
When asked if the dollar's decline was concerning, Trump replied, "No, I think it's great," adding that "the dollar's doing great" and that he wanted its value to "find its own level" naturally.
These comments added fuel to the already deep dollar weakness, after markets were already unsettled by Trump's frequent policy changes and sparked concerns that global investors would withdraw funds from US assets.
Following Trump's remarks, the Bloomberg Dollar Spot Index briefly extended its decline to around 1.2%, and the dollar weakened against most major currencies before stabilizing somewhat in the Asian session.
Some pressure also came from the strengthening of the Japanese yen since last week, as markets braced for possible intervention by Japanese authorities to support its currency.
Trump also said he "could make the dollar go up and down like a yo-yo," but stated that this was not ideal. He again touched on the practice of currency weakening in Asia (China and Japan), which he said complicates trade competition.
5 key points:
Trump said the dollar's weakening was "great" and he wasn't worried.
The dollar fell its deepest since early 2022; the Bloomberg Dollar Index widened to around -1.2% after Trump's comments.
The market interpreted the statement as a "green light" to continue selling the dollar, amid concerns about unpredictable US policy.
The strengthening yen and rumors/anticipations of Japanese intervention added to the pressure on the dollar.
Political pressure and policy issues (including tensions with allies) were said to have eroded sentiment toward US assets. (az)
Source: Newsmaker.id
