100 days of Trump's impact on the U.S. dollar
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The dollar has fallen nearly 10% in President Trump's first 100 days, the steepest drop for a new administration this century.
Why it matters: The start of the second Trump administration has upended America's economic standing in the world.
By the numbers: The U.S. Dollar Index in Trump's first 100 days fell 9.5%, compared to a 2.1% drop in the first 100 days of his first term.
- The value of the greenback increased 4.5% in George W. Bush's first 100 days, when the country was headed into a recession. It also rose slightly for both Barack Obama and Joe Biden.
Zoom in: Investors used to buy the dollar in good times and bad, making it a "safe haven," as Axios' Felix Salmon recently explained.
- Now as recession fears rise, primarily due to tariff uncertainty, investors are shedding greenbacks.
- "Investors stopped treating the dollar as a flight to safety currency and started treating it as a risk currency, a risk asset," Steve Kamin, a former Federal Reserve economist now at the American Enterprise Institute, told Axios earlier this month.
The big picture: Trump's policies, particularly those broad and constantly changing tariffs, have eroded "American exceptionalism."
- That's the notion, reinforced by the nation's post-pandemic comeback, that the U.S. economy could consistently outperform its peers.
- "There in my view remains little to like about the greenback, with the 'US exceptionalism' narrative stone dead," Michael Brown, a senior research strategist at Pepperstone, wrote in a note on Tuesday. The dollar is "the most exposed asset of all to the ongoing trade uncertainty," he wrote.
Between the lines: Part of what made America an exceptional place for investors in the past was certainty that the rule of law would be followed, that economic policy would be clearly messaged and put in place, and that we had close economic ties with allies.
- Events of the last 100 days have led to uncertainty along all those lines.
For the record: "The Trump administration is committed to protecting the strength and power of the U.S. dollar," White House spokesman Kush Desai said in an emailed statement.
- He added, "Trillions in historic investment commitments since President Trump was elected from industry leaders including TSMC, Apple, and Roche demonstrate resounding confidence in the U.S. economy and dollar under this administration."
