The dollar has lost its value against other major currencies of U.S trading partners since Donald Trump became president. The dollar has lost its worth against the Euro, British Pound, Japanese Yen and the Canadian Dollar. The dollar index has also been down since the beginning of the year. Donald Trump once stated in an interview with the Wall Street Journal in early April that the dollar is 'too strong.' His economic policies might be causing the downward movement of the dollar.
The value of the U.S dollar
On January 20 this year during Trump's inauguration, the U.S dollar index was at the 103.29 point mark.
It's worth on Monday morning this week was 91.54 points. It has thus lost its index value by 11.5 percent; this shows that currencies of the U.S major trading partners are on the rise. On January 20 the value of the dollar to the IMF special drawing rights was 1 XDR to 0.738 U.S dollars. The value has gone down to 1 XDR to 0.701. Its value against the SDR has fallen by 5 percent since January 20. On January 20, one Euro was being exchanged for 0.93449 U.S dollars. Today, one Euro is being exchanged for 0.83341. Its value against the Euro has gone down by 11 percent since Trump's inauguration.
Trump's comments
According to the Financial Times, on January 17, 2017, Trump stated that the U.S dollar was too high against the Chinese currency.
"U.S companies are unable to compete with Chinese companies since the dollar is too high. It's killing us." Trump told the Wall Street Journal. On April 12, Trump again spoke to the Wall Street Journal, saying that a strong dollar was becoming an impediment to the U.S economy. "The U.S dollar is becoming strong because people have confidence in me,"
Trump also vowed to continue labeling China, a 'currency manipulator.' This was also a topic of discussion in Obama's administration.
A weak dollar
Weak currencies such as the Chinese Yuan have allowed China to export cheaply. In 2016, China exported $2 trillion worth of goods to the rest of the world compared to $1.4 trillion worth of goods that The United States sold to other countries. Germany was third at $1.2 trillion.
A weak dollar will enable the U.S.
to export cheaply to foreign buyers. It will also make it less lucrative for countries such as China to sell goods and services to the U.S. Threats that might arise as a result of a weakening U.S dollar include inflation risks, an increase in government borrowing and a reduced holding of U.S dollars by foreign banks.
