Dollar drop ’doesn’t matter’ claims Donald Trump, but netizens flag ‘insane kamikaze trade war’

Donald Trump's series of tariff tantrums, interrupted by a 90-day pause on tariffs, escalating trade tensions with China, all have led to an economic turmoil across the globe. Amid all this, the US dollar weakened against major currencies this week, hitting its lowest level in 10 years against the Swiss franc and a three-year low against the euro.

Despite such a murky scenario, Donald Trump claimed “it doesn't matter that the dollar went down this week.” Instead, he told reporters the dollar “will go up and be stronger than ever."

Netizens, however, felt otherwise, with X user stating:

“Dollar is crashing. Bond market is imploding. Asia is buying gold and dumping US Treasuries Trump needs to stop this insane kamikaze trade war, before it takes down the entire global financial system.”

The Dollar's downfall

The dollar continued to slide against major currencies on Friday as the back-and-forth over import tariffs shook investor confidence in the safety of the greenback.

On Wednesday, April 9, after Donald Trump stunned markets by rolling back steep tariffs on trade partners, the US dollar rebounded against the safe-haven Swiss franc and Japanese yen.

Just the next day, however, traders were readjusting their positions with the dollar dropping 2% to 144.795 yen and 3.6% versus the Swiss franc to 0.82635 . Major stock indices such as S&P 500, Dow Jones, Nasdaq also fell sharply.

‘nuking America's economic credibility’

Although Donald Trump boldly claimed the dollar decline ‘did not matter,’ netizens across the globe think otherwise. Social media was flooded with reactions, with many X users slamming Trump for the havoc his policies had just wreaked.

“ Trump’s trade war isn’t just backfiring — it’s nuking America’s economic credibility. DXY at 99.00 — below the psychological floor. Big money already leaving,” added another.

A third person wrote: "The anti-American narrative is so strong that it is selling a "dollar crash" with a 2.7% decline in the trade-weighted dollar index and a "bond collapse" with a 1.8% real yield."

Dollar hit by global selloff

The dollar has been hit hard by a global selloff that spread to stocks and even safe-haven U.S. Treasuries. The yields on benchmark 10-year notes are on course for their biggest weekly jump since 2001, reported Reuters.

Why is the dollar declining?

Brad Bechtel, global head of FX at Jefferies, said the dollar's weakness is partly due to growing concerns that US economic strength is fading, with fears of a potential recession on the horizon. Consequently, investors are shifting away from the dollar as a safe-haven asset, turning instead to the Japanese yen and Swiss franc.

“There's a great rotation, which is basically foreign investors diversifying away from the U.S. into other regions such as the euro zone. And for those foreign investors still involved in the U.S., they're realizing they need to currency hedge their assets. There's a scramble to do so, which is putting additional pressure on the dollar,” Reuters quoted Bechtel as saying.

Moreover, as per data collated by Reuters, consumer sentiment deteriorated sharply in April while 12-month inflation expectations surged to the highest level since 1981 amid unease over the trade tensions.

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