Key Points :
President Trump explicitly endorsed the U.S. dollar's recent sharp decline, stating, "I think it's great," which immediately accelerated its sell-off.
His comments are seen as a "green light" for traders to sell dollars, driven by an administration preference for a weaker currency to boost exports—a "calculated risk."
The dollar's plunge is occurring despite typically supportive factors like rising bond yields and an expected pause in Fed rate cuts, defying traditional market logic.
Investors are fleeing to alternative assets like gold (hitting record highs) in a so-called "debasement trade," signaling a loss of confidence in U.S. policy stability.
Analysts warn Trump's unpredictable policymaking—from tariff threats to Fed pressure—is the core risk, "battering" the currency and rattling global investors.
Trump has a history of contradictory views on the dollar, praising both its strength and the competitive advantages of a weak currency.
