Most Asian currencies rallied sharply on Monday, led by gains in the Japanese yen and Australian dollar, after the U.S. dollar fell to its lowest level in three years amid President Trump’s comments on Federal Reserve leadership. Market attention also centered on China’s decision to hold loan prime rates steady.

U.S. Dollar Index Tumbles

Dollar Index: Down 1.2% to 98.18 (lowest since March 2022)

Trigger: White House adviser Kevin Hassett confirmed President Trump is exploring options to remove Fed Chair Jerome Powell, stoking concerns over central bank independence.

Context: Powell last week signaled rates would remain elevated given tariff?driven inflation risks.

Major Currency Moves

Japanese Yen (USD/JPY): Fell 1.1%

Japan’s core CPI accelerated to 3.2% YoY in March, complicating the BOJ’s rate outlook.

Australian Dollar (AUD/USD): Rose 0.8%

Singapore Dollar (USD/SGD): USD/SGD fell 0.5%

South Korean Won (USD/KRW): USD/KRW fell 0.4%

Thai Baht (USD/THB): USD/THB fell 0.7%

Malaysian Ringgit (USD/MYR): USD/MYR fell 0.8%

Indian Rupee (USD/INR): USD/INR fell 0.5%

China’s LPR Decision

Loan Prime Rates: One?year LPR held at 3.10%, five?year LPR at 3.60%

Policy Tilt: Signals Beijing’s preference for fiscal support—social welfare and consumer subsidies—over further monetary easing amid tariff uncertainty.

What’s Driving the Moves?

Fed Independence Concerns: Potential removal of Powell raises questions about U.S. rate?setting credibility.

Tariff Uncertainty: Elevated U.S. tariffs risk fueling inflation and economic slowdown.

Monetary Divergence: China’s rate hold vs. rising underlying inflation in Japan and signals of further Fed hawkishness.

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