Dollar suffers worst one-day slide since last April after Trump says currency hasn't fallen too low

• The dollar index, which tracks the U.S. currency against six major trading partners, experienced its steepest drop since April 10, 2025, when it fell nearly 2% amid trade disputes and threats of a 145% tariff on China
• Trump compared the dollar's decline favorably to past currency devaluation practices by China and Japan, noting he 'used to fight like hell' against their efforts to devalue the yen and yuan to gain competitive advantages
• The previous worst day for the dollar (April 10) coincided with significant stock market losses, with the S&P 500 dropping 3.5% and the Nasdaq falling 4.3%

Summary: Dollar Posts Steepest Drop Since April on Trump Currency Comments

Key Development:

The U.S. dollar plunged approximately 1.3% on Tuesday, marking its worst single-day decline since April 10, 2025, and falling to its lowest level since February 2022. The sell-off was triggered by President Trump's comments endorsing the weaker currency.

Trump's Stance:

During an Iowa visit promoting his economic record, Trump responded positively when asked about the dollar's current value after a 10% decline over the past year. "I think it's great," Trump stated, noting that a weaker currency helps U.S. businesses compete against countries like China and Japan, which he accused of historically devaluing their currencies (yen and yuan) to gain competitive advantages.

Market Context:

The dollar index, which measures the greenback against six major trading partners (excluding China), experienced its steepest drop since April 10, 2025, when it fell nearly 2% amid escalating trade tensions and threats of a 145% tariff on China. That previous decline coincided with significant equity market losses, including a 3.5% drop in the S&P 500 and a 4.3% slide in the Nasdaq Composite.

Implications:

Trump's endorsement of a weaker dollar signals a shift in U.S. currency policy, potentially favoring export competitiveness over dollar strength. This stance may continue pressuring the greenback lower, with implications for international trade dynamics, import costs, and inflation. The president's comments suggest tolerance for further currency weakness as part of his broader economic strategy, contrasting with traditional preferences for a strong dollar among U.S. policymakers.