The US dollar has hit its lowest value in over three years, while the FTSE 100 reached a record high, driven by concerns about President Donald Trump’s latest trade threats and the weakening American economy. Investors are moving away from the dollar in favor of the yen and euro, causing the US currency to depreciate by nearly 10% against other major currencies since the start of the year. The FTSE 100 surged to 8,884 points, surpassing its previous record, as investors shifted their focus away from US stocks.

This economic shift is attributed to recent data showing a weakening US jobs market and unpredictable policies from the White House, leading to uncertainty about the country’s economic outlook. President Trump recently reiterated his intention to unilaterally impose specific tariff rates, heightening market anxiety. Additionally, speculation is mounting that the Federal Reserve may expedite interest rate cuts following lower-than-expected inflation figures and a drop in producer prices.

The US jobs market showed signs of strain, with a rise in unemployment claims in May reaching the highest level since August 2023. Analysts suggest there is a significant trend of selling the dollar, as investors seek stability amid concerns about government debt and economic growth under President Trump.

The UK stands to benefit from a trade boost after President Trump expressed intentions to enact a bilateral trade agreement with the UK, aiming to eliminate additional duties on British cars while easing US beef and ethanol export quotas. This development comes as the pound rose against the dollar, although concerns about the UK’s economic performance tempered gains.

India and the US are currently at odds over steel and aluminum import tariffs, with further talks potentially leading to retaliatory measures from India if negotiations falter. The Indian government has reportedly resisted US demands concerning genetically modified crops and medical device price controls.

Economic analysts highlight a consistent depreciation of the dollar since President Trump’s inauguration, citing increased government debt and doubts about America’s future economic growth as key deterrents for dollar investments. The global market is adjusting to these shifts, seeking higher interest rates and a weaker exchange rate to lend to the US, reflecting broader concerns about the trajectory of the US economy.