Dollar Falls to Lowest Point Since March 2022 Amid Economic Uncertainty
The US dollar experienced a significant depreciation on Monday, hitting its lowest point since March 2022, as investor confidence in the US economy waned. The currency dropped to 97.923 against a basket of other currencies, while also reaching a decade-low against the Swiss franc. The euro surged above $1.15, its highest value since November 2021, and other currencies, such as the British pound and Australian dollar, also saw gains. This decline in the dollar’s value reflects mounting concerns about the stability of the US economy, exacerbated by political tensions.
Analysts pointed to President Donald Trump’s recent attacks on Federal Reserve Chairman Jerome Powell as a key factor behind the dollar’s slide. Through social media, Trump harshly criticized Powell, calling him a “major loser” and demanding immediate interest rate cuts. These remarks raised fears about the central bank’s independence, further contributing to investor unease and the weakening of the dollar. The US currency also faced downward pressure due to the uncertain impact of Trump’s trade policies, including the imposition of tariffs.
The global financial community has been increasingly concerned about the effects of Trump’s tariff policies, which have intensified market volatility. Powell himself warned that the economic repercussions of these tariffs would be more severe than initially anticipated, leading to higher inflation and slower growth. As a result, investors are becoming more cautious, pulling money out of US assets, which further undermines the dollar. This negative sentiment has triggered a broader shift in global currency markets.
Meanwhile, the Nigerian naira displayed mixed performance on the foreign exchange market. While it showed slight appreciation in the official market, the currency depreciated significantly in the parallel market. Despite the slight improvement in the official exchange rate, the overall trend suggests continued challenges for the naira as it navigates external pressures.
Source: Punch