The American currency showed a sharp decline on Wednesday, January 28, falling to its lowest level since the beginning of 2022. This happened after President Donald Trump publicly approved the current weakening of the dollar, which investors interpreted as a signal for a massive sale of assets in the United States. This is reported by Reuters, writes UNN.
Details
The dollar index fell to 95.566, losing more than 1% in one trading session. Trump's comments that the current low value of the currency is "great" intensified investors' fears about the instability of the White House's economic policy. Against this background, the euro exceeded the threshold of 1.2 dollars for the first time in four years, and the pound sterling reached a maximum of $1.3796.
This indicates a crisis of confidence in the US dollar
According to experts, the Trump administration deliberately allows the currency to fall to stimulate exports and "heat up" the economy ahead of the 2026 midterm elections.
Confrontation with the Federal Reserve
The dollar crisis is unfolding against the backdrop of unprecedented pressure on the Federal Reserve. Today's Fed meeting is taking place amid a criminal investigation by the Department of Justice into agency head Jerome Powell and a lawsuit surrounding the dismissal of board member Lisa Cook. Traders expect the central bank to leave rates unchanged, but political interference creates high volatility.
In addition to internal conflicts, the exchange rate is under pressure from expectations of a coordinated intervention by the US and Japan to support the yen. In total, in 2025, the dollar lost more than 9% of its value, and in January 2026, the decline was already about 2.3%, which makes gold and other currencies more attractive to global investors.