Dollar Slumps to Near 3-Year Low as Trump Targets Fed Chair Powell

April 22, 2025 – DailyForex.pk
The US dollar continued its slide on Tuesday, hovering near its lowest levels in nearly three years, as persistent criticism of Federal Reserve Chair Jerome Powell by President Donald Trump rattled investor confidence in the American economy.

The dollar index (DXY), which tracks the greenback against six major currencies, stood at 98.454, having dropped to 97.923 in the previous session—its lowest since March 2022.

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🗣️ Trump-Powell Conflict Undermines Dollar Stability

The recent selloff was triggered by Trump’s fiery Truth Social post on Monday, where he called Powell a “major loser” and demanded an immediate rate cut to avoid an economic slowdown. The president’s remarks follow ongoing speculation about his desire to remove Powell from office.

“There’s this terrible stalemate,” said Eric Kuby, CIO at North Star Investment. “Markets are worried that if Trump acts to replace Powell, it could trigger a panic in the dollar.”

White House economic adviser Kevin Hassett confirmed on Friday that Trump’s team was reviewing legal options to remove Powell—just a day after the president said Powell’s termination “cannot come fast enough.”

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🏦 Fed Stands Firm Amid Political Pressure

Despite mounting political attacks, Powell has remained cautious, stating last week that the central bank would wait for greater clarity on the impact of tariffs before adjusting interest rates. He warned that premature easing could fuel long-term inflation, particularly amid Trump’s ongoing trade war.

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🌏 Trade Tensions Add to Dollar Weakness

The dollar’s decline is also being fueled by worsening US-China trade relations.

On Monday, China accused Washington of abusing tariffs, and warned countries against entering trade deals with the U.S. that could hurt Beijing’s interests. This statement adds fuel to the ongoing US-China tariff standoff, which has already seen US tariffs raised to 145%, prompting a 125% retaliation from China.

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📉 Dollar Struggles Across the Board

• Against the Swiss franc, the dollar held at 0.8095, close to a decade low of 0.8042
• USD/JPY was at 140.99, hovering near Monday’s seven-month low of 140.48
• EUR/USD was steady at 1.1502, after hitting 1.1573 on Monday—its highest since November 2021
• GBP/USD was stable at 1.3376, following a rally to 1.3421, its strongest level since September
• AUD/USD traded at 0.6414, just off Monday’s four-month peak of 0.6436

According to Joseph Capurso of Commonwealth Bank of Australia, “The longer the speculation around Fed independence drags on, the more the dollar remains at risk.” He added that it may take a significant sell-off in US bonds or equities to convince Trump to dial down the rhetoric.

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📌 Outlook: Dollar Vulnerable Amid Political and Economic Uncertainty

With:

• Escalating Trump-Powell tension
• Mounting global trade pressures
• Growing speculation over Fed independence

…the dollar remains under pressure. Traders will closely monitor upcoming Fed commentary, White House statements, and economic data for signals on where the currency heads next.

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