Trump’s Iowa Remarks Send Dollar Sliding, “Mar-a-Lago Accord” Speculation Resurfaces Despite Bessent’s Reassurances

Trump: “Not worried about a weaker dollar—it’s doing fine”
Dollar index plunges to a four-year low; gold and other safe havens surge
Wall Street focuses on scenarios pressuring major currencies to appreciate

Uncertainty surrounding President Donald Trump’s comments on the dollar and speculation over a so-called “Mar-a-Lago Accord” is sending strong shockwaves through foreign-exchange markets. The dollar has fallen to its lowest level in four years, while major currencies such as the euro and the pound, along with safe-haven assets including gold, silver, and bitcoin, have surged. As volatility intensified, U.S. officials moved to reaffirm the strong-dollar policy and played down the likelihood of immediate market intervention.

On Wall Street, however, attention is turning to the possibility that Trump could effectively steer the dollar lower through a multilateral currency agreement. Some experts warn that policy risks under the Trump administration, including tariffs, could undermine a dollar-centric financial order that has endured for more than half a century.

“We won’t artificially defend the dollar like Japan or China”

According to the Financial Times and Reuters on the 28th, markets reacted sharply after Trump signaled tolerance for a weaker dollar, reinforcing the perception that the U.S. administration is largely unconcerned about downside risks to the currency and increasing perceived risk in dollar-denominated assets. At an event in Iowa on the 27th, Trump dismissed concerns about a weaker dollar, saying, “No, I’m not worried,” adding, “I think it’s great.” He went on to say, “Look at our business—the dollar is doing very well.”

Trump criticized China and Japan for what he described as artificially weakening their currencies. “I used to fight like hell with China and Japan,” he said, accusing them of repeatedly devaluing the yen and the yuan and calling it unfair. While arguing that such moves make competition difficult, he added, “I could make the dollar go up and down like a yo-yo if I wanted, but our dollar is still great.” He concluded that the U.S. would allow the dollar to “find its own level,” signaling no intention to prop it up artificially.

Following the remarks, the dollar suffered its largest one-day drop since April. The dollar index fell to 95.58, its lowest level since early 2022. European currencies strengthened on the back of the dollar’s decline: the euro rose 1.4% to $1.204, and the pound climbed 1.2% to $1.384, both reaching their highest levels since the second half of 2021. Capital also flowed rapidly into precious metals and digital assets. Silver prices jumped more than 8% to exceed $112 per ounce, while gold surged 3.5% to a record $5,185 per ounce. Bitcoin gained about 1% to top $89,000.

“Strong-dollar policy means building sound fundamentals”

As currency markets roiled, Treasury Secretary Scott Bessent stepped in to reaffirm the administration’s stance. In an interview with CNBC, Bessent said, “The United States has always maintained a strong-dollar policy,” adding that it means “building the right economic fundamentals.” He argued that if sound policies are pursued, capital will naturally flow into the U.S., and that because the administration is currently focused on reducing the trade deficit, a stronger dollar over time would be a natural outcome.

On the possibility of market intervention, Bessent struck a cautious tone. Asked about rumors that the New York Federal Reserve had conducted a recent “rate check”—a preliminary step often associated with preparations for currency intervention—he declined to comment beyond reiterating the strong-dollar policy. Markets interpreted his remarks as a signal that authorities are closely monitoring exchange-rate conditions, even if immediate intervention is not on the table.

Some analysts note that the phrase “strong dollar,” long used by successive Treasury secretaries to underscore confidence in the reserve currency, does not necessarily imply an explicit goal of dollar appreciation. Bessent has previously emphasized monitoring whether certain countries keep their currencies artificially weak, rather than actively pushing the dollar lower. Following his comments, markets stabilized somewhat: the dollar index rebounded 0.4%, and the yen-dollar rate moved more than one yen in favor of the dollar.

Weak-dollar strategy possible to narrow trade deficit

Speculation has resurfaced that the Trump administration could pursue a weaker dollar under the framework of a rumored “Mar-a-Lago Accord,” a concept that gained traction shortly after Trump’s election victory. The idea centers on reducing the U.S. trade deficit by guiding the dollar lower while encouraging foreign governments to convert their holdings of U.S. Treasuries into longer-dated bonds. The strategy would restrain the dollar in the short term while spreading U.S. fiscal burdens over a longer horizon. If implemented, it could effectively favor dollar depreciation over a traditional strong-dollar approach and potentially affect the dollar’s reserve-currency status.

On Wall Street, attention is focused on the possibility that Trump could soon summon leaders of major trading partners to his Mar-a-Lago resort to negotiate a multilateral currency accord. The approach would involve leveraging tariff threats to pressure countries into allowing their currencies to appreciate. The U.S. Treasury is reportedly considering deploying a $200 billion foreign-exchange stabilization fund, and recent checks with commercial banks on exchange-rate levels suggest preparatory steps are underway. Reuters reported on the 27th that the Mar-a-Lago Accord may already be taking shape, noting moves to support not only the Japanese yen but also the South Korean won.

Experts warn that heightened policy uncertainty under the Trump administration could erode the dollar’s reserve-currency standing. Kenneth Rogoff, a professor of economics at Harvard University, cautioned that trust in U.S. institutions, the rule of law, security-based hard power, and the independence of the Federal Reserve—all pillars of dollar dominance—are being tested, potentially leading to serious challenges within four to five years. Brown University economist Sevnem Kalemli-Ozcan pointed to tariff policy as a key driver of dollar weakness, while noting that even a diminished reserve-currency role would not necessarily trigger immediate large-scale asset sell-offs.