US dollar falls to lowest since 2022: Mixed reactions, uncertainties, reasons behind

The US dollar fell further on Tuesday, continuing a four-day drop that pushed it to its lowest level since early 2022. President Donald Trump, speaking in Iowa, said he was comfortable with the currency’s decline. When asked if he was worried about the fall, he said, “No, I think it’s great,” and added that US business was doing well. Traders took this as a sign that the administration may favor a weaker dollar to help US exports. After Trump spoke, the Bloomberg Dollar Spot Index dropped 1.2%, weakening against all major currencies. Analysts said his comments encouraged further selling of the dollar.

The US Dollar Index, which compares the dollar with six major currencies, had its biggest one-day drop since April 2025. That earlier drop had happened during tensions with China over tariffs. The current drop is notable because it happened even though bond yields are rising and investors expect the Federal Reserve may pause interest rate cuts. Normally, these factors would strengthen the dollar, but political signals have weighed more heavily this time.

Experts say that Trump’s remarks may cause the dollar to fall further. Chief economist at Bank of Nassau, Win Thin, said Trump “invited another round of selling.” Some in the administration favor a weaker dollar to make US exports more competitive. Analysts caution that a weaker dollar can help trade in the short term but could create problems if it falls too fast.
Recently, the Japanese yen strengthened as traders expected that Japanese officials may intervene to support the currency. This has added pressure on the dollar. Trump’s policies, statements, approach to the Federal Reserve, and trade tensions with countries like China and Japan have further created uncertainty for investors. Investors are turning to alternatives like gold, which has reached record highs.

Trump has long expressed mixed opinions on the dollar. He has praised a strong dollar for trade leverage but also said a weaker dollar can benefit US manufacturers. During his Iowa remarks, he said he could make the dollar “go up or go down like a yo-yo” but warned that extreme swings are not desirable. He also criticized China and Japan for devaluing their currencies to gain an advantage in trade, saying it makes it harder for US businesses to compete.