Falling dollar alarms investors: ‘Trump’s policy is destructive and unpredictable’

‘This drop clearly shows how nervous the market is about the financial direction of the United States,’ Arnold explains. He believes Trump is focused primarily on short-term economic performance ahead of the upcoming midterm elections. ‘His priority seems to be boosting the economy in the run-up to the midterms, with little concern for long-term consequences.’

While a weaker dollar makes American exports cheaper and can temporarily stimulate economic growth, Arnold warns that the broader impact is far more troubling. International investors are increasingly losing confidence in the financial stability of the US. ‘Trump’s policy is highly destructive and unpredictable,’ he says.

As a result, the dollar is losing its status as a traditional safe haven. Investors are shifting their money toward alternatives such as the Swiss franc and gold. The recent decision by major pension funds to scale back investments in US government bonds further highlights the declining trust, according to Arnold.

Uncertainty surrounding the leadership of the Federal Reserve is adding to market tension. President Trump has openly pressured Fed Chair Jerome Powell to lower interest rates faster in order to stimulate the economy, despite the risk of rising inflation.

‘This political pressure on the central bank increases instability,’ Arnold notes. ‘And that instability is directly reflected in the weakening of the dollar.’