“The dollar is the big loser,” the Boston-based money manager said in an interview. “The free marketers, the globalists, one by one, are leaving; the arguments are being won by the economic nationalists.”

It's not just trade and politics that are weighing on the greenback. It's fallen about 3 percent this year, extending a slide of almost 9 percent in 2017 that was fueled by the perception that other central banks would follow the Federal Reserve in withdrawing monetary stimulus.

Tillerson and Trade

Traders sold the dollar and U.S. shares Tuesday on the news of Tillerson's ouster, which followed Cohn's last week after the president imposed tariffs on steel and aluminum imports. In Wednesday trading, it was little changed at 106.30 yen and about $1.2360 per euro.

Goldman Sachs Group Inc. strategists are looking past protectionism to broader reasons for dollar weakness, including an improving global economy and the prospect of tighter monetary policy outside the United States. The firm says Trump's tariffs still fall within the range of actions by previous presidents in the last 20 years, which didn't spur trade wars.

However, U.S. politics appear to be driving investor sentiment. A gauge of U.S. political risk peaked this month in data going back to 2016, according to GeoQuant, an analytics firm in New York.

“Currency traders are bailing out of the dollar,” Karl Schamotta, director of global product and market strategy at Cambridge Global Payments in Toronto, wrote in a note. “This confirms an extraordinary shift in psychology—in the face of turmoil in the White House, the greenback appears to have lost its traditional safe-haven role, with the yen and euro acting as exit valves for fearful market participants.”