The U.S. dollar experienced a significant decline of 1.3% on Tuesday, marking its sharpest fall since last April. This downturn came after President Donald Trump, during a visit to Iowa aimed at promoting his economic record, refrained from criticizing the currency's current valuation.
When questioned by reporters about his view on the dollar's value and whether he believed it had depreciated excessively after a 10% slide over the past year, Trump responded positively. 'I think it's great,' he remarked regarding the weaker dollar. 'I mean the value of the dollar, look at the business we're doing. No, [the] dollar is doing great.'
Trump further illustrated his point by comparing the situation to the practices of other countries like China and Japan. 'You know it's very interesting, if you look at China or Japan, I used to fight like hell with them because they always wanted to devalue their yen ... you know that, the yen and yuan, and they'd always want to devalue it. They devalue, devalue, devalue. And I said, 'not fair.' They devalue, because it's hard to compete when they devalue.'
The Dollar Index, which evaluates the U.S. currency against six major trading partners excluding China, experienced its most significant single-day drop since April 10 of last year. During that period, the index plummeted nearly 2% amid escalating trade tensions and U.S. threats of imposing a 145% tariff on China, which also saw the S&P 500 and Nasdaq Composite drop by 3.5% and 4.3%, respectively.
This latest development also pushed the dollar to its lowest level since February 2022.