The value of the U.S. dollar continued to fall, while the euro rose above the symbolic threshold of $1.20 on Tuesday evening. The shift follows comments made by U.S. President Donald Trump that suggested the weakening of the U.S. currency is at least acceptable to him.
When asked by reporters in Iowa about the declining dollar, Trump said, “No, I think it’s great. Look at our deals. The dollar is doing great.” He added that it was appropriate for the currency to “find its own level,” and claimed he could make the exchange rate “go up and down like a yo-yo” if he wanted to.
Earlier on Tuesday, the euro had already reached its highest level in more than four years. By the evening, the dollar continued to weaken further. In the end, one euro traded at $1.2043. The dollar also fell against the British pound, the South Korean won, and the Chinese yuan.
“Political unpredictability is undoubtedly having a negative impact on the dollar,” analysts at Monex USA said. Joshua Mahony, an analyst at Scope Markets, stated that “confidence in the dollar as the primary guarantor of security appears to have eroded under the presidency of Trump.”
The weaker dollar initially brings good news for European consumers, as U.S. imports and dollar-denominated goods such as crude oil become cheaper. For exporters, however, the stronger euro poses challenges, making European products more expensive in the United States.
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