Originator of the "Dollar Smile Theory": Trump's remarks may indicate the beginning of a new round of dollar depreciation.

U.S. President Trump's relaxed attitude towards the weakening dollar has intensified market speculation that the dollar may be at the beginning of a long-term downward trend. Trump's comments have weakened the attractiveness of the dollar and U.S. Treasury bonds, driving so-called devaluation trades. Stephen Jen, the founder of Eurizon SLJ Capital and the proponent of the "dollar smile theory," said that this marks a new stage in the devaluation of the dollar, with the Trump administration aiming for a favorable exchange rate for U.S. exporters. "This is likely just the beginning of the next round of dollar depreciation, and many may be unprepared for it," said the former Morgan Stanley forex strategist. "A generation of forex analysts is accustomed to a strong dollar and a strong U.S. economy, and cannot comprehend a situation where the dollar weakens while the U.S. economy remains strong."