Trump’s ‘tariffs have backfired’ as the markets ‘are losing confidence in the US economy’

The greenback is under pressure, with the first week of March proving the Dollar’s worst since November 22 and the US Dollar Index (a measure of the Dollar’s value against a basket of currencies) falling by 3.4%.

Since Trump’s inauguration, the Dollar is down 5%.

Newspage asked forex experts and economists for their views on where next for the greenback.

Harry Mills, Director at Oku Markets said, “The U.S. exceptionalism theme that helped the Dollar’s 9% rally into 2025 is fading with recent disappointing economic data.

“This week’s inflation data are key, with the Fed increasingly concerned over stagflation as economic activity pulls back whilst inflation persists. Tag-on President Trump’s chaotic trade policies and markets are losing confidence in the US economy’s resilience and in the Dollar as a safe-haven, favouring gold, the Swiss franc, and Japanese yen instead.

“EURUSD upside targets of $1.10-12 aren’t unimaginable, whilst GBPUSD may test $1.30 should the greenback continue to weaken.”

Prem Raja, head of trading floor at Currencies 4 You added, “Since President Trump returned to the White House, we have seen pretty much all gains erased across stocks, crypto and FX.

“This is mostly due to uncertainty surrounding tariffs and policy. GBPUSD has hit a new 2025 high of 1.29, and EURUSD rose above the 1.08 level, also the highest for this year due to weakness in the Dollar.”

Pete Mugleston, mortgage advisor and managing director at Online Mortgage Advisor said, “Trump’s tariffs have backfired, much like the disastrous Smoot-Hawley Tariff Act of the 1930s, which deepened the Great Depression by stifling global trade.

“Protectionist policies may sound appealing, but they rarely deliver sustained economic strength. Then and now, tariffs have triggered retaliation, increased business costs, and hurt consumer spending.

“By restricting imports and disrupting supply chains, Trump’s trade wars have weakened investor confidence in the Dollar and slowed economic growth. If this continues, the U.S. risks further currency depreciation, with Sterling and the Euro potentially gaining as global markets look for more stable economic policies.”