Trump’s Remarks Weaken the Dollar

Rowan Ashford

Published: January 29, 2026 2:35 AM ET

Markets are once again responding to remarks made by Donald Trump, particularly related to the strength of the U.S. dollar. Recent comments from Trump, where he stated that the dollar was “doing great,” contributed to a wave of selling in the currency market.

Impact of Trump’s Remarks on the Dollar

The euro surged past $1.20 for the first time in over four and a half years. Concurrently, the Swiss franc soared to its highest level in ten years. Experts suggest the growing risk of dollar exposure during Trump’s presidency is increasingly evident.

Factors Contributing to Dollar Decline

Geopolitical tensions
Trump’s economic policies
The U.S. administration’s preference for a lower dollar value
Concerns about Federal Reserve independence

These elements collectively dragged the dollar index down more than 9% last year. Furthermore, recent geopolitical events, including Trump’s controversial Greenland comments, have heightened investor nerves. Additionally, there’s speculation that the U.S. may engage in dollar selling to support Japan’s yen.

Market Reactions

Investors are increasingly looking to hedge against dollar volatility. According to TD Securities analyst Prashant Newnaha, holding Treasuries at 4% while suffering a 10% loss on the dollar is a daunting prospect for foreign investors. This sentiment has spurred the Australian Retirement Trust, Australia’s second-largest pension fund, to reduce its dollar exposure while maintaining U.S. investments.

Gold and Australian Dollar Performance

The declining dollar has led to gold prices surpassing $5,200 per ounce. Simultaneously, the Australian dollar has strengthened beyond 70 cents, fueled by rate expectations.

Rate Hike Speculations

Recent data showcased unexpected inflation in Australia, raising the probability of a rate hike next week to over 70%. All four major Australian banks anticipate an increase in rates.

Upcoming Financial Events

The focus for investors will also be on the following key developments:

U.S. Federal Reserve meeting
Bank of Canada meeting
Earnings reports for Meta and Tesla after market close

Amid these dynamics, market reactions are likely as investors await updates that could further impact the dollar’s performance and broader financial landscape.