The U.S. dollar is trading at a four-year low against a basket of foreign currencies as investor confidence in America weakens and capital shifts into alternative assets such as gold.
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In afternoon trading on Jan. 27, the Dollar Index, which tracks the greenback against a basket of six other currencies, fell to 96.20, a four-year low. Other factors impacting the U.S. dollar include the Federal Reserve’s latest interest rate decision that’s due on Jan. 28, and a possible currency intervention in Japan.
The U.S. dollar has seen heavy selling in recent days, sending the Dollar Index down to its lowest level since February 23, 2022. The U.S. dollar fell 10% in 2025, and analysts say that the world’s reserve currency has continued to see heavy selling to start 2026 due to concerns over the Federal Reserve’s independence and geopolitical tensions over Venezuela and Greenland.
Trump’s Role in the Dollar’s Decline?
The U.S. dollar’s steep decline has led some analysts to speculate that the Trump administration might be looking to devalue the greenback on purpose to help drive demand for U.S. exports. In the past, Trump and other members of his government have said that a strong U.S. currency isn’t good for business.
The current decline in the dollar is also due to the Japanese yen and speculation that the U.S. and Japanese governments are preparing to intervene to prop up the Asian nation’s currency. The yen is rapidly declining due to the selling of Japanese government bonds.
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