The US dollar is on a downward trajectory even after Trump’s optimistic remarks, who defended the currency value on Tuesday by calling it “great.”
However, soon after Trump’s comments, the dollar slipped to four-year low, having lost nearly 2.8 percent since last week.
Upon asking about the current value of the dollar, Trump said, “No, I think it’s great, the value of the dollar … dollar’s doing great.”
“If you look at China and Japan, I used to fight like hell with them, because they always wanted to devalue,” he added.
For some months, the dollar has been experiencing a slump, stemming from various factors ranging from tariff threats, curtailed independence of Fed, and prospects of interest rate cuts to rising fiscal deficits.
Consequently, investors are losing confidence in US economic stability and turning to metal-based assets as safe havens.
Given the shaking confidence of investors in the dollar, gold surged past $5200 an ounce on Wednesday, breaking all the records in an unprecedented market rally.
According to Kyle Rodda, a senior market analyst at Capitol, “It shows there’s a crisis of confidence in the U.S. dollar. It would appear that while the Trump administration sticks with its erratic trade, foreign and economic policy, this weakness could persist.”
