The US dollar plunged on Monday as investor confidence in the American economy weakened further due to President Donald Trump’s intentions to intervene in the operations of the Federal Reserve.
This followed remarks on Friday by White House economic adviser Kevin Hassett, who revealed that Trump and his team were still exploring whether it was possible to dismiss Federal Reserve Chair Jerome Powell. This came a day after Trump publicly expressed his frustration, stating that Powell’s removal couldn’t happen soon enough, while also demanding interest rate cuts.
According to reports, the dollar sank to a 10-year low against the Swiss franc and hit a seven-month low against the Japanese yen, while the euro surged to its strongest level in three years, reflecting the deepening lack of confidence in the US currency.
Trading activity was subdued due to Easter Monday, with markets in Australia and Hong Kong closed. Most global markets had also been shut on Good Friday.
“Technically, Trump can’t fire Powell directly as the Fed Chair doesn’t report to the President. Removal requires specific legal procedures, which are difficult to trigger,” said Vishnu Varathan, Head of Macro Research for Asia ex-Japan at Mizuho. “However, the mere perception that the White House could tamper with the Fed’s independence is enough to shake markets.”
According to reports, the euro reached $1.153275, while the dollar fell to a decade low of 0.80695 against the Swiss franc and was down 1.1% against the yen at 140.63. The British pound climbed over 0.5% to $1.3380—its highest since October 1—and the Australian dollar hit a two-month high of $0.64015.
“It’s a perfect storm for those betting against the dollar,” Varathan added. “Between trade policy chaos and doubts about the Fed’s autonomy, investor sentiment is badly shaken—even before factoring in the Powell controversy.”
Analysts noted that Trump’s aggressive tariff measures and erratic trade policies have unsettled global markets, casting a shadow over the US economic outlook and driving investors away from US assets, further weakening the dollar.