Dollar falls after Trump comments
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The dollar weakened against other major currencies Tuesday afternoon after President Trump told reporters in Iowa that he was not concerned about the recent decline in the dollar and wanted the currency to "seek its own level," per Bloomberg.
Why it matters: U.S. presidents historically talk up the dollar's strength whenever asked.
- Trump's failure to recite a variation of that longstanding boilerplate appeared to rattle currency traders who have recently seen the dollar fall and the Japanese yen gain amid speculation of a joint currency intervention.
- The U.S. dollar index, a measure of its strength against other major currencies, fell to its lowest level since February 2022, per Reuters.
Driving the news: Speaking before a speech in Iowa, where Trump is expected to focus on the economy, the president was asked whether he thought the dollar has declined too much.
- "No, I think it's great," Trump responded. "I think the value of the dollar — look at the business we're doing. The dollar's doing great."
Yes, but: Trump also said that he did not want the dollar's value to decline further.
- "I would want it to be — just seek its own level," he said.
Zoom out: The dollar has come under pressure over the last 12 months amid concerns over Trump's tariffs and fiscal policy as well as geopolitical tensions, most recently over Greenland.
Between the lines: Trump, however, has repeatedly noted that dollar strength makes U.S. companies less competitive abroad.
- "You make a hell of a lot more money" with a weaker dollar than a stronger one, he said in July.
- When it comes to the dollar, Trump talks like no other U.S. president before him.
