The value of the U.S. dollar plunged Tuesday, after President Donald Trump said he was not concerned about the currency’s recent drop.
“I think it’s great,” Trump said, speaking to reporters in Iowa, when asked if the dollar’s value had declined too much. “The dollar’s doing great.”
Before Trump’s comments, the benchmark ICE U.S. Dollar Index was already on pace to record its worst three-day drop since Trump’s April 2025 “Liberation Day” tariff rollout.
After Trump’s comments, the value of the dollar as measured by the index sharply extended its slide to as much as 1.5%, putting it on track for its worst one-day drop since April.
As of 4:30 p.m. ET, the U.S. dollar sat at its weakest level since early 2022.
The ICE U.S. Dollar Index measures the strength of the dollar compared with a basket of foreign currencies, such as the euro, British pound, Japanese yen, Canadian dollar and Swiss franc. The index rises when the dollar’s value increases and declines when its value drops against those currencies.
Real-world impacts
The value of the U.S. dollar directly affects consumers.
As the dollar drops, it becomes “more expensive for Americans to travel abroad,” Morgan Stanley analysts wrote last year. “U.S. assets could be less compelling for foreign investors” and “import prices could rise, putting pressure on inflation,” they added.
“On the positive side, however, the weaker dollar could be a boost for American exporters,” the Morgan Stanley analysts wrote.
Speaking to reporters in Iowa, Trump said he wanted the U.S. currency to “just seek its own level, which is the fair thing to do.”
“I could have it go up or go down like a yo-yo,” Trump also said.
“If you look at China and Japan, I used to fight like hell with them, because they always wanted to devalue their yen,” Trump said. “It’s hard to compete when they devalue. But they always want our dollars.”
Since Trump rolled out his global tariff agenda last year, the dollar has been on a downward trajectory. While stocks recovered after the market chaos sparked by those tariffs, the dollar has not. In 2025, the dollar index logged its worst year since 2017, having declined 9%.
The dollar’s drop over the last few days has also been fueled by abrupt moves in the Japanese yen, after Prime Minister Sanae Takaichi called a snap election.
