US Dollar Hits Four-Year Low Amid Market and Policy Uncertainty

Published: 28 January 2026. The English Chronicle Desk. The English Chronicle Online.

The US dollar has plunged to its lowest level in four years, shaking global markets and prompting investors to seek traditional safe havens like gold and the Swiss franc. Market watchers note that the dollar’s sharp decline has intensified following President Donald Trump’s dismissal of concerns regarding the currency’s slide. Speaking in Iowa, Trump insisted that the falling dollar “is great” and claimed that US business remained strong, despite mounting evidence of market turbulence.

This significant dollar drop, marking a cumulative 10% decline over the past year, came after a 1.3% fall against a basket of major currencies on Tuesday, followed by a further 0.2% slide on Wednesday morning. Experts warn that this trend reflects both geopolitical uncertainties and domestic policy instability, with unpredictable moves including Trump’s threats of territorial acquisitions and additional tariffs.

Investors have increasingly turned to the Swiss franc, which reached its highest level against the dollar in over a decade, reinforcing its reputation as a resilient store of value. The euro has also strengthened, climbing to $1.20 against the dollar, recording its biggest weekly gain since April of last year. Market strategists observe that a weaker dollar benefits multinational companies earning overseas revenue, but simultaneously raises the cost of imported goods, potentially fueling domestic inflation.

Gold prices have surged alongside the dollar’s decline, breaking $5,200 (£3,770) per ounce. This represents a remarkable 90% increase since Trump’s second inauguration, highlighting investor preference for tangible assets amid political and economic uncertainty. Analysts suggest that continued dollar weakness may drive gold and other safe-haven investments even higher in the coming months.

Concerns about the dollar’s trajectory are compounded by pressure on the Federal Reserve. Despite Trump’s public calls for interest rate cuts, the Fed is expected to maintain rates during its first announcement of 2026. The president’s criticism of Chair Jerome Powell, whom he has threatened to remove, adds a layer of political uncertainty to US monetary policy. Powell’s term is due to expire in May, potentially introducing further volatility should a new appointment follow the upcoming decision.

Financial commentators emphasize that the dollar’s decline carries broad implications. It may assist American companies with foreign operations, as overseas revenue converts advantageously into weaker dollars. However, the same trend increases the cost of imported goods, affecting consumer prices and adding complexity to the US inflation outlook. Investors are therefore watching currency movements closely, balancing gains in overseas revenue against potential domestic cost pressures.

The dollar’s fall reflects a combination of internal political pressures, an expansive US debt burden, and a volatile global environment. Analysts caution that further weakness is plausible if uncertainty surrounding presidential influence on economic policy persists. Multinational corporations, currency traders, and global investors are all adapting to an environment in which the US dollar no longer commands the same dominance it held just a few years ago.

As the Swiss franc and euro reach multi-year highs against the US dollar, and gold continues to climb, market participants are recalibrating their strategies. The dollar’s trajectory will remain central to decisions in international finance, trade, and investment, with global economies closely monitoring how domestic political developments impact the greenback’s performance.

In conclusion, the US dollar’s slide to a four-year low underlines the intricate connections between political actions, economic policy, and investor sentiment. Safe-haven assets such as gold and the Swiss franc have become critical refuges for capital, while multinational businesses consider how to leverage currency fluctuations. Analysts suggest that the coming months could see continued volatility, with investors maintaining heightened vigilance as the United States navigates both domestic challenges and global financial pressures.

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