Trump's approval rating hits multi-year highs: Three reasons and dollar implications

  • President Trump's approval rating is near the levels seen just after his inauguration.
  • The Senate acquittal, messy Democratic Party primaries, and a strong economy are behind the rise.
  • The US dollar has room to rise for a limited time, with Trump potentially sending it lower.

Making the dollar great again? Paraphrasing President Donald Trump's 2016 election campaign, the greenback has room to rise alongside the president's approval rating. However, the occupant of the White House may also push it back down. 

According to FiveThirtyEight, Trump's approval rating is standing at 43.9% while more people disapprove of his performance – 51.8% according to the website – the highest since just after his inauguration in early 2017. 

Trump approval rating February 2020

Source: FiveThirtyEight

Here are three reasons for the growing support:

1) Acquittal with broad support

Trump is enjoying a trio of positive developments. The Senate acquitted him of any wrongdoing in his attempts to extract damaging information on potential rival Joe Biden from Ukraine. While a handful of Republican Senators acknowledged that Trump withheld vital military aid to the Eastern European country for political reasons, only one voted to oust him – and only one charge. 

The upper house was never going to remove Trump from office – as a two-thirds majority was required – but the almost uniform backing by his party is a welcome development for the president. Rallying the Republican base – rather than winning the center – was Trump's strategy in 2016, and that may happen again in 2020.

2) Iowa mess

And while Republicans are united around their standard-bearer, the Democratic Party looks lost. The Iowa caucuses ended in a farce that delayed the publication of the results. Moreover, there was no clear winner in the first state that hold primaries – the Associated Press said that it is too close to call. Centrist Pete Buttigieg and Left-leaning Bernie Sanders were in the lead.

Trump reveled in the uncomfortable state of his opponents that continue their long primary season. Even before the race had begun, the opposition had no clear leader such as former president Barrack Obama to rally the masses.

Schadenfreude is also helping Trump's case. 

3) Strong economy

The US Unemployment Rate remains around 50-year lows around 3.5-3.6% while the labor market continues adding jobs. Inflation is under control despite an extended holiday shopping spree. And while Gross Domestic Product growth has returned to around 2%, America outperforms its rivals.

In various surveys, Americans give Trump better notes on the economy than on other topics. The president is taking advantage of this by touting and claiming these achievements to himself. That seems to work – for enough citizens to back him.

Potential dollar impact – up and then down

Markets prefer business-friendly Republicans over Democrats. While Trump is not a normal center-right politician but rather a populist, investors cheer his 2017 tax cuts and deregulation.

Trump has been pushing the dollar higher in another way. His trade wars with China – that seem settled until the elections – have triggered safe-haven flows into the dollar. The recent increase in the greenback's value is also the result of the coronavirus outbreak, which adds to the flight to safety.

Overall, the currency has strengthened and has room to extend its gains if Trump's reelection chances continue rising. 

However, the strong dollar irritates Donald Trump. He sees any appreciation of the greenback – and the accompanying decline of other currencies – as a competitive disadvantage for the US. The president has repeatedly been bashing the Federal Reserve, first for raising rates, and then for not cutting them at the speed and depth that he wanted. 

Apart from complaining about the exchange rate and criticizing Jerome Powell – the Fed Chair that he appointed – Trump may move to change the central bank and fill it with his loyalists. That may happen even before the elections and tilt the Federal Open Markets Committee in favor of weakening the dollar. 


Overall, President Trump has significant influence over the dollar, and his growing support may push the greenback higher. However, he may actively move to send the currency lower or "keeping the dollar down" – a paraphrase on his 2020 election campaign. 

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Feed news

Latest Forex Analysis

Latest Forex Analysis

Editors’ Picks

EUR/USD recaptures 1.1300 amid falling yields, EZ inflation eyed

EUR/USD is trading above 1.1300, extending the upside amid a renewed risk-off wave. The US dollar tracks the sell-off in the Treasury yields, shrugging off Moderna Inc.'s warning against the Omicron covid variant. Eurozone inflation, Powell’s testimony awaited.


GBP/USD rebound appears capped near 1.3330 amid risk-aversion

GBP/USD is making a minor recovery attempt above 1.3300 on Tuesday, as the US dollar turns south again in tandem with the Treasury yields. Renewed Omicron covid variant fears damp the market mood as well as the pound. Focus on covid updates, US data and Powell.


Gold inches back closer to $1,800 amid Omicron variant fears

Gold picks up bids to refresh intraday high. Risk appetite improves as market players reassess covid variant fears. Policymakers, experts reject concerns over the need for major lockdowns, readiness to have vaccines sooner.

Gold News

XRP price on edge of cliff as Ripple faces imminent collapse

XRP price followed the rest of the cryptocurrency market lower over the weekend. The US Thanksgiving holiday gave cryptocurrency traders and investors some early Black Friday deals, but downside risks remain.

Read more

Cyber Monday 2021 Discounts!

Glued to your trading screen on Cyber Monday? Upgrade your skills by signing up for FXStreet’s Premium service, offered at a discount of up to 50%. Fellow traders have already taken advantage of Black Friday profits. What about you? 

Subscribe now!