Dollar drops to lowest point in four years

The United States dollar has dropped to its lowest level in four years, following comments by President Donald Trump that dismissed concerns over the currency’s decline. 

The slide has sent investors toward traditional safe-haven assets such as gold and the Swiss franc.

The dollar fell 1.3% against a basket of currencies on Tuesday and declined a further 0.2% on Wednesday morning, marking its fourth day of losses. 

“No, I think it’s great,” Trump said during a visit to Iowa, when asked about the weaker dollar. “I think the value of the dollar look at the business we’re doing. The dollar’s doing great.”

Over the past year, the greenback has tumbled roughly 10%, and Tuesday’s drop was its largest single-day fall since last April, following Trump’s tariff announcements. 

The currency has now reached its lowest point since February 2022 amid unpredictable policymaking and geopolitical shocks, including threats from Trump to take over Greenland and impose tariffs on European allies.

Steve Sosnick, a market strategist at Interactive Brokers, said the weaker dollar has mixed effects. “If you have operations around the world and foreign currency revenue, that will have a conversion advantage when you turn it into US dollars. 

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On the other, it makes imported goods more expensive and there might be some inflationary impact from that.”

The dollar’s decline has lifted rival currencies and assets. The Swiss franc has climbed to its highest level against the dollar in more than a decade, while the euro reached $1.20, marking its biggest weekly gain since last April. 

Gold surged past $5,200 an ounce, continuing a record-setting rally that began earlier this year.

The Fed is expected to maintain interest rates in its upcoming decision, despite Trump’s calls for cuts.

Trump has also criticized Fed Chair Jerome Powell, calling him “stupid” and threatening to fire him. Powell’s term ends in May, and Trump could name a successor shortly after the Fed’s decision.

(The Guardian Uk)