The issue that Mr. Trump is "agonizing" about changing the global currency game, will the US President "take a chance"?

President Donald Trump seems to believe that a strong dollar like the one it currently has is holding back American industry.

All the uncertainty surrounding the US dollar raises big questions, and any attempt to devalue the currency could have unintended consequences. (Source: Forbes)

In July 2024, when running for US President, Mr. Trump told Bloomberg Businessweek that he wanted a weaker greenback.

"Manufacturers often complain that no one wants to buy American products because they are too expensive, while other countries try to maintain a weak domestic currency to have an advantage in exporting. That is a huge burden for American companies that want to sell goods abroad. It is a huge burden," Mr. Trump emphasized.

In the White House's view, the US needs a weaker dollar to boost exports, restore manufacturing jobs and help reduce the trade deficit.

A strong greenback would make American goods more expensive abroad, making them less affordable for consumers.

And the dollar is really going down.

Tariffs and trade uncertainty have raised concerns that US economic growth will slow, and major shifts in Washington’s foreign policy have fueled optimism about the European economy.

The above issues have caused the USD to fall sharply against the EUR. As of March 21, the USD Index (DXY), which measures the strength of the greenback against a basket of major currencies, stood at 103.78. Meanwhile, the EUR was anchored at $1.0852.

Since mid-January 2025, the USD has fallen about 4% against the EUR.

Mr. Katie Nixon of Global Financial Services Company Northern Trust predicts: "What has happened in the past few weeks has the potential to change the global currency game."

However, not many people share this prediction.

According to experts, the decline of the US dollar remains modest, hardly enough to create a big change for exporters of the world's largest economy.

Meanwhile, controlling the exchange rate of the USD is extremely complicated and beyond the control of any president.

The value of the US dollar is determined by the global foreign exchange market, not by any government, explains David Lubin, a senior fellow at Chatham House.

Part of the reason the greenback has maintained its strength over the past decade is the stronger economic growth in the US compared to other industrialized countries, Anthony Abrahamian, investment strategist at private investment bank Rothschild & Co Wealth Management, also argued.

Explaining the country's trade deficit, Mr. Abrahamian said that American consumers are the world's number one customers, they spend more freely than elsewhere. Therefore, this country has the ability to import more than export. And this shows that the greenback does not have too much impact on the US trade deficit.

However, according to DW , the US government still has some levers to adjust the greenback. First , the simple way is that the US Federal Reserve (Fed) can cut interest rates.

Second , the US Treasury could buy foreign currency through the Exchange Stabilization Reserve. But according to Mr. Abrahamian, the Treasury would have to buy large amounts of foreign currency because the current size of the currency market is up to trillions of dollars.

Third, bad signals in the US economy could also push the value of the domestic currency lower.

Fourth , President Trump's frequent changes in his views on tariffs could also make the policy environment in the country more unstable, thereby making the US less attractive as an investment destination.

"This could weaken the US dollar. However, this is a dangerous and unpredictable double-edged sword," argued David Lubin.

All the uncertainty surrounding the US dollar raises big questions and any attempt to devalue the currency could have unintended consequences.

A weaker greenback could have knock-on effects such as boosting commodity prices, a worry for households in the world’s largest economy.

Even if President Trump were to devalue the dollar, it would not really boost the country’s competitiveness, Abrahamian said, because currency prices are driven not only by exchange rates but also by factors such as production costs, productivity and quality.

Source: https://baoquocte.vn/van-de-ong-trump-dau-dau-thay-doi-cuoc-choi-tien-te-global-cau-tong-thong-my-co-lieu-mot-phen-308391.html