When asked in Iowa on Tuesday whether he was worried about the depreciation of the US dollar, Trump told reporters, “No, I think it’s great. I think the value of the dollar – look at the business we’re doing. The dollar is doing great.”
Trump hinted that he could manipulate the US dollar exchange rate, saying, “I can make it go up and down like a yo-yo.”
The above remarks further exacerbated the dollar’s decline, which had already recorded its biggest drop since last year’s tariff policy triggered a market rout, and intensified concerns that its erratic policy shifts would lead to a withdrawal of overseas investors from the United States. After his speech, the Bloomberg Dollar Spot Index’s decline widened to 1.2%, with the dollar weakening against all major currencies, but it steadied slightly in Wednesday’s Asian trading session.
For a long time, Trump has been accusing other countries of trying to boost exports by depressing their currencies’ exchange rates. Treasury Secretary Scott Bessent has also emphasized the distinction between the dollar’s price and its value as a reserve currency. Therefore, these latest remarks are seen as a green light for traders to sell the dollar.
Many members of Trump’s cabinet hope for a weaker dollar to boost export competitiveness, said Winson, chief economist of Bank of Nassau. “They are taking a calculated risk. A weaker currency is beneficial, but if the situation gets out of control, the consequences could be disastrous.”
Trump’s capricious policies have also exacerbated the decline of the US dollar, which has unsettled overseas allies and investors: he threatened to seize Greenland; he pressured the Federal Reserve; tax cuts have worsened the deficit; and his leadership style has deepened the political polarization in the United States.
Despite the rise in government bond yields and market expectations that the Federal Reserve will pause rate cuts at its meeting on Wednesday – both of which are typically seen as supportive for the dollar – the currency has still declined recently. In fact, Trump has been publicly calling for a significant reduction in interest rates, which will undoubtedly further depress the dollar.
For years, Trump’s views on the US dollar have been inconsistent. On the one hand, he has praised a strong dollar as an advantage in bilateral negotiations; on the other hand, he has talked about the benefits of a weak dollar for manufacturing. “I like a strong dollar, but a weak dollar makes you more money,” he said last year.
Technical analysis:
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Gold: The strong price trend remains unchanged, and we only consider a bullish approach. Given that the Federal Reserve meeting will be announced tonight, we only suggest paying attention to the performance in the 5150/5130 area. If it is confirmed to be stable, we will continue to look for bullish signals. For detailed positions, please consult the plugin.
(Gold 15-minute chart)
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Nasdaq: The price maintains an upward bias within a volatile pattern. After hitting a low near 25,800 overnight, it has continued to rise. Currently, the price has reached above 26,000. We suggest holding onto the low long positions after the liquidity sweep. Pay close attention to the 25,900/25,800 area, and if necessary, attempt 1-2 times. For detailed positions, please consult the plugin.
(NASDAQ 15-minute chart)
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Crude oil: The price has broken through the downward channel trend of the past week and recaptured the 61.80/62 level. Within the day, we suggest closely monitoring the pullback confirmation at this area. You can try to place orders and look for low-buy signals after the liquidity is swept. For detailed positions, please consult the plugin.
(Crude Oil 15-Minute Chart)
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Today’s key financial data and events to focus on:
22:45 Canadian overnight target rate
03:00 US Federal Funds Rate Benchmark
At 03:30, the Chair of the US Federal Reserve, Powell, will hold a press conference on monetary policy.
