USD Crumbles as Trump Endorses Devaluation; Consumer Sentiment Collapses

Washington/New York — The US Dollar Index (DXY) extended its aggressive sell-off on Wednesday, plunging to a four-year low near 95.57, after President Donald Trump broke with traditional strong-dollar doctrine, explicitly stating he views the currency's weakness as “great” for business.

Trump's “Green Light” for Bears

In a move that caught currency desks off guard, President Trump brushed off concerns regarding the dollar's sharp depreciation. “No, I think it's great,” Trump told reporters, adding that American businesses are performing well under the current exchange rate regime.

Market analysts have interpreted this not merely as observation, but as policy. “The President has effectively given a green light to dollar bears,” noted a senior FX strategist. “When the White House signals that devaluation is a tool for export competitiveness, the floor falls out from under the Greenback.”

Consumer Confidence at Recessionary Levels

Adding fuel to the fire, the Conference Boards Consumer Confidence Index for January collapsed to 84.5, its lowest reading since May 2014. The data paints a grim picture of the US consumer, with the “Present Situation” and “Expectations” sub-indices both deteriorating sharply.

Despite headline GDP growth remaining robust (4.4% annualized in Q3), the sentiment data reveals a “K-shaped” fracture in the economy.

Trade Implications

• AUD/USD & NZD/USD: Surged as the USD weakened, though capped by risk-off sentiment elsewhere.
• Gold (XAU/USD): The weaker dollar has acted as rocket fuel for precious metals, pushing spot gold past historic psychological resistance.
• Fed Outlook: The combination of political pressure for easy money and crumbling consumer morale virtually cements expectations for a Dovish pause at the upcoming Federal Reserve meeting, leaving the USD with few macro supports.