US Dollar Plunges to Four-Year Low Amid Political Uncertainty and Market Reaction
Daily Politics Desk Economy
The US dollar has fallen sharply, reaching its weakest level in four years against a basket of global currencies. This significant decline, which saw the dollar index drop by over 1.3% in a single day, represents the currency's worst daily performance since April 2025.
The immediate catalyst for the accelerated drop was a public statement from President Donald Trump. When asked about the currency's ongoing slide, he responded, "I think it's great," and brushed off concerns, stating the dollar was "doing great." This remark, which surprised markets, signaled a lack of executive branch concern about currency weakness and contributed to immediate selling pressure.
The dollar's weakness extends beyond a single day, reflecting deeper investor apprehension. The currency has tumbled by approximately 10% over the past year, weighed down by unpredictable US policy shifts, geopolitical tensions, and a broader market reassessment of the country's fiscal outlook. The lack of traditional support from the White House for a strong dollar, a departure from long-standing norms, has amplified this trend.
This depreciation has direct, real-world consequences. A weaker dollar makes imported goods more expensive for American consumers, potentially exacerbating inflationary pressures. It also makes foreign travel costlier and can reduce the appeal of US assets for international investors. Conversely, it may provide a competitive boost to American exporters by making their goods cheaper abroad.
In response to the dollar's fall, investors have flocked to traditional safe-haven assets. The Swiss franc has surged to a decade-high against the dollar, while gold has continued its extraordinary rally, breaking through the $5,200 per ounce barrier to set new record highs. The euro has also strengthened significantly, crossing the $1.20 threshold. The situation places a spotlight on the upcoming Federal Reserve policy decision and the future of its leadership, adding another layer of uncertainty to the currency's trajectory.
