US dollar drops to lowest level in four years as Trump touts 'economic success'

Inflation and a falling dollar continue to harm US workers while benefiting US multinational corporations

News Desk - The Cradle 

The US dollar fell to its lowest level in four years on 28 January, after US President Donald Trump said a weak dollar was good for US businesses while promoting his economic policies.

Asked by journalists on Tuesday whether he was concerned about the dollar's recent slide, he told reporters, “I think the value of the dollar – look at the business we're doing. The dollar's doing great.”

The dollar dropped by 1.3 percent against a basket of currencies after the president's comments. The greenback has now declined 10 percent over the past year.

The weak dollar has harmed the purchasing power of consumers, making US workers poorer.

But Trump touted the dollar's decline because it makes US-made products cheaper for foreign buyers, allowing US multinational companies to sell more of their products internationally.

“A weaker dollar is a two-sided coin,” Steve Sosnick, a market strategist at Interactive Brokers, told The Guardian.

“If you have operations around the world and foreign currency revenue that will have a conversion advantage when you turn it into US dollars, that will be good. On the other, it makes imported goods more expensive and there might be some inflationary impact from that.”

Other global currencies and gold have reached multi-year highs as investors flee the greenback in search of havens.

The Swiss franc has climbed three percent against the dollar so far this year, after rising 14 percent in 2025.

The euro has also surged to $1.20 against the dollar, a new high, after rising 13 percent last year.

The price of gold reached new highs this week, reaching $5,200. Its price has jumped by almost 90 percent since Trump returned to the White House last year.

While Trump boasts of his economic successes, confidence in the US economy fell to its lowest level in more than a decade amid rising inflation as “consumers fretted about geopolitical tensions, affordability and President Donald Trump's unrelenting trade war,” CNN wrote on Wednesday.

The Conference Board's Consumer Confidence Index for January declined 9.7 points to a reading of 84.5 – the lowest level since 2014.

“References to prices and inflation, oil and gas prices, and food and grocery prices remained elevated,” stated Dana Peterson, chief economist at The Conference Board.

“Americans are frustrated with rising prices for groceries and electricity, and they are fearful of the hiring recession that's underway right now,” wrote Heather Long, Navy Federal Credit Union's chief economist.

“The K-shaped economy is great for the top 20 percent, but many middle-class and moderate-income Americans are barely keeping up,” she added in a commentary published on Tuesday.

The fall in the dollar comes as governments of two of the world's largest economies, India and China, have drastically reduced their investments in US Treasuries in recent months.

India's holdings of long-term US sovereign debt have dropped to $174 billion, down 26 percent from a 2023 peak, according to recently released US government data.

China has also reduced its holdings of US Treasuries in recent months, with holdings falling $11.8 billion in October to $688.7 billion, the lowest level since 2008.