Trump Shakes the Dollar: Worst Performance in Decades

During the early months of Trump’s presidency, the US dollar recorded its worst performance in decades,
raising investor concerns about the currency’s future.

Topic

Dollar Performance

Trump Policies

Currency Outlook

Dollar Performance

Since Donald Trump assumed office on January 20, the US Dollar Index has declined by about 9% through April 25,
marking its largest loss during the first 100 days since Nixon’s era in 1973.
Unlike previous trends where new presidencies boosted the dollar’s strength,
Trump’s early term triggered pressures that reversed the usual upward momentum,
diverging from the historical 0.9% average gain recorded between 1973 and 2021.

Trump Policies

By fulfilling several campaign promises, Trump imposed new tariffs and
adopted a more aggressive stance towards China and other trading partners.
These policies pushed investors toward non-US assets, strengthening currencies
like the euro, Swiss franc, and Japanese yen, each rising more than 8% against the dollar.

Additionally, Trump’s comments about the Federal Reserve and Chairman Jerome Powell shook market confidence.
His threats to dismiss Powell, though later denied, raised serious concerns about the Fed’s independence.

Currency Outlook

Major banks, including Deutsche Bank and UBS Group, have downgraded their forecasts for the US dollar,
warning of a potential long-term structural decline.
Speculative bets against the dollar have surged, reaching their highest levels since October 2024,
with short positions amounting to around $10 billion as of mid-April.

Amid growing trade tensions with China and fears of a domestic economic slowdown,
the US dollar faces an uncertain future, weighed down by weakening global confidence in American fiscal and trade policies.

Trump Shakes the Dollar: Worst Performance in Decades

Trump Shakes the Dollar: Worst Performance in Decades

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