The dollar is experiencing its worst performance during the first 100 days of a U.S. presidency since the era of Richard Nixon, as Donald Trump imposes tariffs and attempts to reshape global trade.
Trump’s trade policy, aimed at revitalizing domestic manufacturing, strengthening the industrial base, and improving national security, has driven investors toward assets outside of the U.S. This has resulted in a weakening dollar and boosted other currencies as well as gold.
Recent data indicate that China remains reliant on foreign demand, while South Korean exports to the U.S. have declined. Government forecasts suggest that the German economy will struggle to grow this year.
In the U.S. and Canada, a dollar index is on course for its worst performance in the first 100 days of a presidency since the U.S. moved from the gold standard to a floating exchange rate during Nixon’s tenure. The U.S. dollar index has decreased by about 9% from January 20, when Trump returned to the White House, to April 25, marking the largest decline by month’s end since at least 1973.
Economic forecasters predict a negative impact on the U.S. economy due to Trump’s trade policy. The economy is expected to grow by 1.4% in 2025 according to a Bloomberg survey, down from a 2% growth forecast in the previous month. Economists now estimate a 45% chance of a recession within the next year, an increase from 30% in March.
Canada’s incoming prime minister is anticipated to face economic challenges with half a year of stagnant growth, as Trump’s trade policies dampen business investment and exports.
In Asia, China’s robust first-quarter growth conceals a key vulnerability: an increasing dependency on foreign demand, which poses a risk amid rising trade tensions. Japan saw sustained high business service prices, indicating lingering inflationary pressures ahead of U.S. tariff impacts. Early trade data from South Korea indicate a reduction in shipments, highlighting the potential impact of U.S. policies on export-dependent economies.
In Europe, Germany is projected to experience minimal economic growth this year, posing a significant challenge for the incoming Chancellor Friedrich Merz. European car sales saw a rebound last month, driven by gains in the UK and strong demand for electric vehicles, despite weaker sales in Germany and France.
In emerging markets, Kenya is set to surpass Ethiopia as East Africa’s largest economy after the Ethiopian birr was devalued, with Kenya’s GDP projected to reach $132 billion. Brazil’s annual inflation has accelerated to its highest level since February 2023, shortly after central bank directors reaffirmed the effectiveness of tight monetary policies.
Globally, the International Monetary Fund revised down its world growth forecasts, highlighting risks from Trump’s tariffs that could escalate into a global trade war. The IMF reduced its forecast for global growth to 2.8%, reflecting the slowest expansion since 2020.
California has become the world’s fourth-largest economy, surpassing Japan, with a nominal GDP of $4.1 trillion. Central banks in Indonesia, Paraguay, Russia, and Uzbekistan have all maintained their interest rates this week.
