US Dollar Plunges as Trump’s Fed Criticism Sparks Investor Concerns
The U.S. dollar experienced a sharp decline on Monday amid escalating investor anxiety over the Federal Reserve’s autonomy, following new remarks from President Donald Trump hinting at a possible push to oust Fed Chair Jerome Powell.
The dollar slumped across global currency markets, reaching a decade-low against the Swiss franc and hitting a seven-month low versus the Japanese yen.
Meanwhile, the euro soared to its highest point in three years, and emerging market currencies posted notable gains.
The drop in the dollar was triggered by comments from White House economic adviser Kevin Hassett, who confirmed that the administration is still evaluating legal avenues to potentially remove Powell from his post.
Trump has consistently criticized the central bank for its reluctance to cut interest rates, recently stating that Powell’s removal “can’t happen soon enough.”
Although legal scholars argue that the president does not have direct authority to dismiss the Fed chief, analysts warn that even the appearance of interference could severely undermine the Fed’s credibility and independence.
“All it takes is the perception that the Fed’s independence is under threat to destabilize market confidence,” said Vishnu Varathan, head of macro strategy at Mizuho Bank in Singapore.
The dollar index, which measures the greenback against a group of major currencies, fell to 98.267—its lowest in three years. The yen climbed to 140.63 per dollar, the euro reached $1.1533, and the British pound broke past $1.3380. Both the Australian and New Zealand dollars hit multi-month highs.
Investors are also increasingly uneasy about Trump’s erratic trade stance, which has led to global market volatility and shaken U.S. economic prospects.
Stock markets mirrored this unease, with S&P 500 futures dropping 0.6% and Japan’s Nikkei index losing over 1%. Gold prices surged past $3,370 per ounce as demand for safe-haven assets spiked, while Brent crude slipped 1.75% to $66.77 amid signs of easing tensions with Iran.
Market watchers are now turning their attention to upcoming earnings reports from major U.S. corporations and any new developments regarding Federal Reserve policy as political scrutiny intensifies.
