Donald Trump says shrinking US dollar is 'great' - here’s how it could affect you
To the majority of world leaders, the daunting prospect of your country's currency dropping in value is something to dread - to Donald Trump, it's 'great'.
The American President, 79, appeared at a press conference in Iowa today (28 Jan), where he was asked by reporters to comment on the sudden drop of the US dollar - the lowest it's been valued in over four years.
This gradual decrease, which started over the weekend and has been sinking ever since, marks staggering loss compared to other nations, and has reportedly seen investors turning to either gold or the Swiss franc to cover their payments.
On Tuesday, it dropped by 1.3 per cent - the most considerable since April when Trump implemented his bizarre reciprocal tariff plan - and by Wednesday, had shot down by another 0.2.
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This formed only a small part of an overall decrease of over 10 per cent, which has been recorded over the last 12 months.
Many financial experts have put this drop down to Trump's ceaseless threats of a 'takeover' of Greenland, as well as his constant discussions on the future implementation of further European taxes as a result of their lack of support of his mission.
It's also likely that his proposed military action against Iran, and the controversial capture of Venezuelan leader Nicolás Madura hasn't helped his cause.
According to Trump, however, despite the almighty blow to America's monetary prospects, it's business as usual.
Asked if he was concerned by the USD's viable slide in value, the Republican leader bit back: "No, I think it’s great. I think the value of the dollar – look at the business we’re doing."
As if trying to convince himself, he added: "The dollar’s doing great."
His thought process likely comes from the belief that a weaker currency might help certain industries - like manufacturers and oil firms - to boom.
One could also argue that a weakened dollar helps businesses that export goods and services abroad to earn higher amounts, given that bosses can technically convert international payments into watered-down greenback.
The issue is, however, that this week's reality might see the purchasing power of other US businesses taking a beating - something chief market strategist Karl Schamotta has concerns about.
On Trump, he told Sky News this week: "With the 'tariff man' showing no sign of repentance and the US government headed into another shutdown, economic policy uncertainty is soaring once again."
This he added, could result in 'an intensification in the 'Sell America' trade that has dominated markets for the better part of a year'.
"Positive fundamentals should eventually reassert themselves, but for now, no one is willing to catch the falling chainsaw that is the US dollar."
If you're reading this from the UK, and believe you're exempt from the drama just because the GBP is at its highest value against the USD, you might want to think again.
Sure, any Brit thinking of travelling to the States soon will get more for their money, and for UK business, the cost of US goods that are imported will come right down, having a positive impact on inflation.
But, it could also trigger heightened competition between UK companies exporting to the US - especially in light of the damning new tariffs Trump threatened to impose on Starmer this weekend, after the PM wouldn't support his Greenland plan.
The weakened value of the dollar will also hit US earnings of British businesses quite hard, as well as any US-based investment values.
On top of this, a number of workplace pension schemes might have have dollar-denominated assets, which will also take a beating.
Topics: Donald Trump, Money, Politics, US News, UK News
Rhianna Benson