The Trump administration may have little to show in the way of legislative successes, but one key area where it can book a victory is in exchange rates, Pimco argues.

"Much of the world has been waging a cold currency war since the autumn of 2016, and so far the winner is Donald Trump," Pimco's global economic adviser Joachim Fels writes in a blog post.

Overnight, the US dollar index - which tracks the greenback against a basket of major currencies - slid to its lowest level in 14 months, showing the dollar rally that followed the US election is well and truly history.

The Aussie shot through US80¢ for the first time in more than two years overnight, while the euro has risen more than 10 per cent against the greenback this year.

That's mainly due to sinking US rate rise expectations as inflation dwindles, but also a result of uncertainty surrounding the Trump administration's ability to push through it pro-growth economic plans like tax cuts and infrastructure spending.

But Fels sees a more fundamental reason for the decline: both White House and US Congress have moved away from decades-long official mantra that "a strong dollar is in our interest", while at the same time threatening other nations, implicitly and sometimes explicitly, with protectionist policies.

"In short, all this trade bullying has killed the dollar bull," he says.

Fels argued last December that a "new cold currency war" had started as some of the world's major central banks introduced policies to push their exchange rates lower.

The Bank of Japan fixed the 10-year yield on Japanese government bonds at 0 per cent at a time when global yields were rising, thus helping the yen to depreciate; the People's Bank of China allowed the yuan to depreciate faster against the US dollar; and the European Central Bank introduced a "stealth rate cut" by removing the deposit rate floor of −0.4 per cent for its bond purchases, which pushed European bond yields lower. 

The result, in combination with Trump's pro-growth talk, pushed the US dollar higher against these currencies.

But things started to change earlier this year when the Trump administration decided to fight back, Fels said.

Key officials ramped up the rhetoric, pushing back verbally against US dollar strength and issuing veiled threats of protectionist actions.

Since then, Fels notes, China has stabilised the value of the yuan, the BOJ has kept policy on hold and the ECB has removed its easing bias and is inching closer to tapering its bond purchases.

"With the US dollar sinking in response, the Trump administration has had no reason to turn aggressively protectionist. Mission accomplished," Fels says.