Dollar extends slide as Trump comments spark selloff: What US president said

The dollar struggled to bounce back on Wednesday after suffering another round of selling, as fresh comments by President Donald Trump suggested he was comfortable with the currency’s recent decline.

The US President’s remarks were weighed further on investor sentiment, keeping the greenback under pressure. At its core, the dollar’s strength rests on confidence — in the stability of US policy, and in the currency’s role as the world’s safest and most liquid asset.

The dollar dropped against the British pound, South Korean won and Chinese yuan this week. Meanwhile, the greenback did rise a little on Wednesday. However, the bump was not enough to make up for its latest losses.

Traders are also closely watching the Federal Reserve’s latest policy meeting, hoping for clues on the future path of interest rates, as uncertainty over the Trump administration’s policies persists following its latest tariff threats, adding to volatility in currency markets.

Why is dollar falling?

The US dollar has fallen against most other major currencies this week after reports emerged that the New York Federal Reserve had checked in with traders about the yen’s exchange rate, which fuelled talk that officials from the US and Japan were prepared to stage a joint intervention, AFP reported.

These reports further led to speculation that the White House was prepared to let the dollar weaken further, and President Trump did not outrightly dismiss the speculation when asked on Tuesday if he was worried about the US currency’s decline.

“No, I think it’s great,” he told reporters in Iowa after the unit hit its weakest level against the euro in four-and-a-half years and a two-and-half-month low against the yen. “Look at the business we’re doing. The dollar’s doing great.”

He further added: “I want it to be — just seek its own level, which is the fair thing to do.”

Observers said that unease over Trump’s recent tariff threats, including warnings to European nations over their opposition to his plans of taking over Greenland and to Canada over its trade talks with China, has also shaken confidence in the United States.