‘It’s doing great’: Trump not concerned about decline of US dollar

CLIVE, Iowa – The US dollar extended its slide, staging the biggest one-day drop since April, after US President Donald Trump said he did not think the currency had weakened excessively. 

“No, I think it’s great,” Mr Trump told reporters in Iowa on Jan 27 when asked if he was worried about a decline that has dragged the world’s premier reserve currency to its weakest level in nearly four years.

“I think the value of the dollar – look at the business we’re doing. The dollar’s doing great.”

“I want it to be – just seek its own level, which is the fair thing to do,” he added.

Mr Trump’s comments added fuel to what was already the dollar’s deepest drop since his tariff roll-out sent markets into a tailspin in 2025 and fanned fears that his erratic policy shifts would drive overseas investors to pull back from the US.

After his comments, the Bloomberg Dollar Spot Index hit a new session low, falling as much as 1.2 per cent, as the US currency weakened against all of its major counterparts.

Some of the decline in the dollar had been caused by the abrupt resurgence in the yen since last week, as traders braced themselves for a potential intervention by Japanese officials to prop up that nation’s currency. 

But the dollar’s drop has also been fanned by unpredictable Washington policymaking – including

Mr Trump’s threats to take over Greenland

– which has rattled European allies. 

Risks around the President’s pressure on the Federal Reserve, worries about the US fiscal outlook and its swelling debt load, and political polarisation are also eroding sentiment, market observers say.

The dollar’s recent drop has come despite a rise in government bond yields and expectations that the Fed is poised to pause its interest rate cuts at its Jan 28 meeting – both of which would traditionally have been seen as supportive of the currency.

The Trump administration may welcome a weaker dollar, given that it would make US products cheaper overseas and potentially help to lower the trade deficit.

Mr Trump on Jan 27 suggested he could manipulate the strength of the dollar, saying “I could have it go up or go down like a yo-yo”.

But he cast that as an unfavourable outcome, likening it to hiring unneeded workers to juice employment numbers and criticised Asian economies that he said tried to devalue their currencies.

“If you look at China and Japan, I used to fight like hell with them, because they always wanted to devalue their yen. You know that? The yen and the yuan, and they’d always want to devalue it. They devalue, devalue, devalue,” Mr Trump said on Jan 27. 

“And I said, not fair that you devalue, because it’s hard to compete when they devalue. But they always fought; no, our dollar’s great,” he added. BLOOMBERG