English
The Dollar Is at Risk in the Trade War... Is Its Global Position at Stake?
The US dollar is one of the most prominent victims of the trade war, in light of recent developments sparked by the United States' decisions on what is known as "Liberation Day" on April 2, when it announced the imposition of comprehensive and reciprocal tariffs on several countries around the world, and the reactions of some countries.
The US currency witnessed a significant decline during the month of April, with the dollar index reaching its lowest levels in three years. This coincided with trade tensions accompanying US President Donald Trump's announcement of the tariffs he announced, some of which were later suspended. However, the ongoing tensions with China and further announcements of the possibility of imposing tariffs have had an impact on the currency's performance.
The dollar index (against a basket of six major currencies) has fallen about 4.7% since the beginning of April, reaching its lowest level in nearly three years, dating back to March 2022.
Since mid-January (just before Trump took office), the dollar index has fallen 9% against a basket of currencies, a rare and sharp decline and the worst start to a year in the index's four-decade history, raising concerns that investors may be losing confidence in the United States.
Currencies are constantly moving up and down due to inflation concerns, central bank actions, and other factors. But economists fear that the recent decline in the dollar's value is so sharp that it reflects deeper investment concerns as President Donald Trump seeks to reshape global trade.
Traditionally, the dollar is expected to rise as tariffs reduce demand for foreign goods. But the dollar's recent performance has not only failed to strengthen but has also fallen sharply, baffling economists and hurting consumers.
