The dollar is on track for its poorest performance during the first 100 days of a U.S. presidency since the era of Richard Nixon, as President Donald Trump enacts tariffs and seeks to reshape global trade.
Trump’s trade policy, designed to revive domestic manufacturing, strengthen the industrial base, and bolster national security, has prompted investors to shift towards assets outside the U.S., leading to a depreciation of the dollar and a rise in other currencies and gold.
Data this week showed China’s continued reliance on foreign demand, while South Korean exports to the U.S. declined this month. German government forecasts predict economic struggles this year.
A dollar gauge is headed for its worst performance during the first 100 days of a U.S. presidency since the Nixon era, when the U.S. abandoned the gold standard. The U.S. dollar index has dropped approximately 9% between January 20, when Trump returned to the White House, and April 25, marking the largest decline since at least 1973.
Forecasters anticipate the U.S. economy will be impacted by Trump’s trade policy. The economy is expected to grow 1.4% in 2025 according to a recent Bloomberg survey, compared to 2% in last month’s poll. Respondents see a 45% likelihood of a downturn in the next 12 months, up from 30% in March.
Canada’s forthcoming prime minister is likely to inherit a prolonged period of economic stagnation, as Trump’s trade war affects business investment and exports.
China’s stronger-than-expected growth in the first quarter highlights a vulnerability: increasing dependence on foreign demand, posing a risk as trade tensions escalate. The domestic economy remains fragile amid deflation, weak consumer demand, and a persistent property slump.
In Japan, business service prices remained high last month, signaling inflationary pressures before U.S. tariffs take effect.
Preliminary April trade data from South Korea indicated a decline in shipments to the U.S. and China, with increases in exports to the European Union and Taiwan.
Revised government forecasts indicate that the German economy may fail to achieve even minimal growth this year, presenting challenges for incoming Chancellor Friedrich Merz. GDP is expected to stagnate after previous years of contraction, whereas earlier projections anticipated 0.3% growth.
European car sales rebounded last month, with gains in the UK and strong demand for electric vehicles compensating for weaker sales in Germany and France. Demand in Italy and Spain also remained robust.
Kenya is poised to overtake Ethiopia as East Africa’s largest economy following a devaluation of the Ethiopian birr. The International Monetary Fund projects Kenya’s GDP will reach $132 billion in 2025, surpassing Ethiopia’s $117 billion.
Brazil’s annual inflation rose to its highest level since mid-February 2023, though central bank leaders maintain that tight monetary policy is effective.
The International Monetary Fund has significantly reduced its global growth forecasts for this year and next, citing potential further deterioration due to Trump’s tariffs instigating a global trade war. The IMF’s projected global GDP growth for this year is 2.8%, marking the slowest expansion since 2020.
California Governor Gavin Newsom announced that California has become the world’s fourth-largest economy, surpassing Japan. The state’s nominal GDP reached $4.1 trillion last year.
Central banks in Indonesia, Paraguay, Russia, and Uzbekistan kept interest rates unchanged this week.
