The dollar plummets to a four-year low, but for Donald Trump, there is no cause for concern.
“The dollar is doing very well”, concluded the U.S. president this Tuesday from Iowa.
Trump publicly defended the evolution of the currency, highlighting the economic benefits of its weakening and suggesting that the market should follow its course without intervention.
“Look at the value of the dollar. Look at the business we're doing. The dollar is doing well, the dollar is very strong,” he declared.
"I would like you to... simply find your own level," he added.
The markets reacted immediately with an acceleration in the sale of dollars, further intensifying the decline of the U.S. currency.
A strategy to protect the American industry?
Beyond its relaxed tone, some analysts -quoted by Reuters and U.S. media- believe that Trump is pursuing a deliberate strategy to weaken the dollar as a means to revitalize the country's manufacturing industry. This perspective is not new.
A year ago, the White House economic advisor, Stephen Miran, presented a report arguing that the dollar was "25% overvalued" due to its status as the world's reserve currency.
He explained that this undermines American competitiveness.
"A dollar that is too strong harms our exports and allows foreign products to enter at too low a price, affecting American manufacturers," Miran emphasized at that time.
In line with this logic, Trump has hinted that he could intervene directly if he wanted to: “I could make it rise or fall like a yo-yo.”
He has reiterated his criticism of countries like China and Japan, which he accuses of manipulating their currencies:
“I used to fight them to the death because they always wanted to devalue... They devalued, devalued, devalued. But our dollar is great,” he emphasized.
The signals from the president have led many to believe that the current weakness of the dollar is not an accident but part of a broader policy aimed at boosting exports and reducing the trade deficit, even if it comes at the cost of creating inflationary pressures.
A sharp decline amid volatility
The dollar has experienced a significant depreciation so far in 2026, accumulating a drop of 2.6% since January and 9% during 2025, according to data from Bloomberg.
This Tuesday, the dollar index— which measures its value against a basket of six major currencies— plummeted to 95.566, its lowest level since February 2022.
In relation to the euro, the greenback is trading around 1.20 dollars, a level not seen in years, making U.S. imports more expensive and benefiting European exporters.
The decline occurs amid a context of economic and political uncertainty in the United States.
Fiscal tensions, persistent public deficits, threats to the independence of the Federal Reserve, and rumors of coordinated currency intervention with Japan to stabilize the yen have undermined investors' confidence in the country's economic stability.
This is compounded by a volatile trade policy, with tariff threats even against traditional partners like Canada.
A weak dollar: risks and benefits
Although a weaker currency may be seen as a sign of economic weakness, not all the consequences are negative. In fact, a depreciated dollar benefits certain sectors:
Exports: American products are becoming more competitive abroad.
Multinationals: They generate higher revenues by converting foreign earnings into dollars.
External debt: Countries and companies with obligations in dollars can pay less from their local currencies.
Trade deficit: A weak dollar helps reduce it by promoting exports and discouraging imports.
Eugene Epstein, an analyst at Moneycorp, summarizes it this way: “The administration wants a weaker dollar… Essentially, it is making it clear that this is a president who cares about the trade deficit.”
However, the weakening of the currency also raises the cost of imports and may drive internal inflation, a risk that does not seem to concern the White House.
Foreign policy, pressures on the Fed, and geopolitical signals
The weakening of the dollar cannot be analyzed in isolation. Behind its decline are also Trump's continuous attacks on the Federal Reserve and his public pressure to reduce interest rates.
Since the beginning of his second term, Trump has questioned the authority of the organization's president, Jerome Powell, even suggesting his dismissal.
On the other hand, Trump has rekindled diplomatic tensions that impact the geopolitical status of the dollar as a reserve currency.
The threat of annexation of Greenland, its rhetoric against NATO allies, and its push for isolationist policies have led some investors to question the reliability of the U.S. as a global partner.
While the dollar weakens, gold has reached historic values, surpassing 5,000 dollars per ounce. This surge reflects the pursuit of safe-haven assets by investors concerned about the direction of the U.S. economy.
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