The U.S. dollar tumbled on Monday, with investor confidence rattled by President Trump’s musings on firing Federal Reserve Chair Jerome Powell and ongoing tariff uncertainties. Thin holiday trading amplified the move, sending major Asian and Western currencies sharply higher against the greenback.
Key Drivers of the Dollar’s Decline
Fed Independence Fears
White House adviser Kevin Hassett confirmed the administration is studying Powell’s removal, undermining confidence in the Fed’s autonomy.
Fed Chair Jerome Powell had just signaled rates will stay higher to counter tariff?driven inflation, prompting Trump’s “termination … cannot come fast enough” remark.
Tariff?Related Growth Concerns
Investors fear U.S. tariffs on trading partners will slow global growth and curtail demand for U.S. assets.
Persistent trade tensions keep risk sentiment fragile, weakening the dollar’s safe?haven appeal.
Major Currency Moves
Currency
Change
Level
Notes
USD/CHF
–1.2%
0.80695
Lowest since 2012
EUR/USD
+1.1%
1.1533
Highest since Nov 2021
USD/JPY
–1.3%
140.615
Seven?month low; JPY net long positions at record high (CFTC data)
GBP/USD
+0.5%
1.3386
Highest since Oct 2024
AUD/USD
+1.0%
0.6427
Four?month high
NZD/USD
+1.1%
0.60035
First time above 0.6000 in over five months
USD/CNY (onshore)
–0.1%
7.2892
PBOC held LPRs steady for the sixth month
Holiday Thinning and PBOC Policy
Thin Volumes: Australia and Hong Kong markets were closed for Easter Monday, while most global markets had closed on Friday.
China’s Rate Hold: The People’s Bank of China left its one? and five?year loan prime rates unchanged, signaling a tilt toward fiscal stimulus over further monetary easing amid the escalating trade war.
Expert Take
“You don’t need to sack Powell immediately—you just need to create the perception you could change the Fed’s independence,”— Vishnu Varathan, Mizuho Macro Research
Varathan noted that a buffet of bearish factors—from tariff uncertainty to erosion of Fed credibility—has emboldened dollar bears worldwide.
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The dollar’s rout highlights the growing impact of political uncertainty and trade tensions on global finance, as investors seek refuge in non?U.S. currencies and reassess the outlook for monetary policy.
