It’s a bad time to be the US dollar this week as the greenback is on a decline in the currency markets. While traders assumed de-dollarization could bring the US dollar down, it was the White House’s policies that shook up the Benjamin. The DXY index, which tracks the performance of the USD hit a high of 109.80 after Trump’s election victory in November. The markets rode the high of Trump’s optimism on America signaling glory days for the country. However, things turned soar after Trump took office and imposed tariffs on Canada, Mexico, and China.
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De-dollarization did not do this much damage to the US dollar but tariffs and trade wars are doing the work. Tariffs were placed on European countries too angered nations across the Atlantic. As the trade wars kicked in, the markets sent mixed reactions making Dow Jones tank 890 points on Monday. It recorded the biggest crash since September 2022 indicating that things are not right in the economy. The development made the US dollar fall from a high of 109.80 in January to a low of 103.36 in March.
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US Dollar Being Hit Internally Through Trade Policies, De-Dollarization Has No Effect
US Treasury Secretary Scott Bessent said “This administration and President Trump are committed to the policies that will lead to a strong dollar,” during an interview with CNBC. However, the opposite is happening as the US dollar is heading south falling to new lows. De-dollarization is not killing the US dollar but unfortunately, the policies of the White House are.
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The economic condition is leaving room for murmurs of a recession and inflation in the homeland. The US dollar’s DXY index has already declined 4.2% year-to-date and the stock market is not doing great either. Developing countries can now cool down on de-dollarization as the US dollar is being hit from within.