US President Donald Trump's administration has been surprisingly successful in talking down the US dollar, confounding analysts who have been predicting the greenback will rise strongly this year.
Since Mr Trump's first post-election press conference on January 10, the US dollar index, which compares the US currency against a basket of others, has lost 3.2 per cent of its value.
The US dollar has also fallen sharply – 3 per cent – against the Australian dollar, which has nonetheless not yet managed to rise much higher than US76¢.
On Tuesday the dollar index fell after Trump used a press conference to raise the prospect of devaluation.
"Other countries take advantage of us with their money and their money supply and devaluation. Our country has been run so badly, we know nothing about devaluation," he said. "Every other country lives on devaluation."
This was shortly after the head of the administration's National Trade Council, Peter Navarro, used an interview with the Financial Times to claim the euro was "grossly undervalued".
The US dollar index also tumbled after Mr Trump failed to outline any fiscal plans in his January 10 conference, and it lost ground again in the wake of a Wall Street Journal article in which he said the currency was "too high" and "killing" American exports. His January 20 inauguration brought another fall.
Mr Trump's seeming centrality to the dollar's recent decline comes despite a universal acceptance that his stated policies would result in a higher US dollar.
For example, his plans for large-scale fiscal stimulus could heat up the economy, potentially sparking inflation that would prompt the US Fed to raise interest rates faster than it would otherwise. This would boost the US currency because of the higher yields on offer.
Added pressure
Another Republican policy, the introduction of a border tax, would add to the pressure. By placing a tax on imports into the US and offering a corporate tax cut that would allow US companies to offset the cost of production of their exports, the policy would be expected to reduce the US trade deficit.
In global currency markets, this would reduce the supply of the US currency, further supporting the price.
In Australia a shortage of US dollars in global markets is associated with "short-term negative effects on Australian growth and inflation", wrote Credit Suisse research analyst Damien Boey. "Historically, US dollar shortages have put downward pressure on rates, yields, currency and house prices."
Not everyone puts Mr Trump's comments at the centre of the US dollar's recent falls.
Commonwealth Bank currency strategist Elias Haddad attributes it to growing concern that Mr Trump's divisiveness means he won't be able to implement his economic agenda.
"One of our underlying themes regarding the currency market is we're very bullish on the US dollar, primarily because we expect the US administration to implement massive fiscal stimulus platform," he said. "The Trump administration failing to implement these measure is a downside risk to the forecasts. Judging from recent developments, there's more risk of that."
In the meantime, Mr Haddad says, we can expect to hear more from Mr Trump on the dollar, but only to short-term effect.
"He can talk down the dollar as much as he wants. But if his policies are implemented, leading to stronger economic activity, leading to higher interest rates, and a higher dollar, there's not going to be anything he can do about that."