The US dollar has fallen to its weakest level in four years, extending a multi-day slide after President Donald Trump publicly dismissed concerns about the currency’s decline, unsettling financial markets and accelerating capital flows into traditional safe-haven assets.
On Tuesday, the dollar dropped about 1.3% against a broad basket of major currencies, marking its fourth consecutive day of losses. The decline continued into Wednesday, with the greenback slipping a further 0.2% in early trading, reinforcing fears that policy uncertainty and political messaging are weighing heavily on investor confidence.
Market analysts say the sell-off was triggered by Trump’s comments downplaying the significance of the dollar’s fall, which investors interpreted as a signal that the administration is either unconcerned about currency weakness or willing to tolerate it. That perception has pushed traders to reassess their exposure to US assets, particularly as interest-rate expectations and fiscal policy signals remain unclear.
As the dollar weakened, demand surged for assets traditionally seen as stores of value during periods of volatility. Gold prices climbed sharply, while the Swiss franc strengthened as investors sought shelter from currency risk. Other major currencies, including the euro and the Japanese yen, also gained ground against the dollar.
The dollar’s decline comes amid broader uncertainty in global markets, where concerns about trade tensions, fiscal sustainability, and the long-term direction of US economic policy are already influencing capital flows. Currency strategists note that while a weaker dollar can boost US exports by making them more competitive, a rapid or disorderly fall risks undermining global confidence in US financial leadership.
For now, markets appear sensitive to political signals as much as economic data. Investors are watching closely for any clarification from the White House or the Federal Reserve that could stabilise expectations and slow the dollar’s slide. Without that reassurance, analysts warn that pressure on the greenback could persist in the near term.
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