During today's Asian trading, the US dollar continued its decline against major currencies, and reached a new 7-month low against the yen, as President Donald Trump's repeated attacks on the Federal Reserve Chairman further undermined investor confidence in the US economy. The dollar was also pressured by news that Thailand's prime minister had postponed trade talks with Washington that were set to begin on Wednesday.
The US Dollar Currency Index (DXY), which tracks the dynamics of the dollar against six currencies (euro, swiss franc, yen, canadian dollar, pound sterling and swedish krona) fell by 0.14% to 98.14 (the lowest value since March 31, 2022). President Donald Trump intensified his attacks on Federal Reserve Chair Jerome Powell, calling him a "major loser" and urging him to cut interest rates "NOW" to avoid an economic slowdown. His comments, posted on Truth Social, follow recent speculation from the White House about whether Powell could be removed from his position. Trump’s criticism came in response to Powell’s statement last week that the Fed would remain patient on interest rate decisions until there’s clarity on inflation risks tied to tariffs. Concerns over Powell’s potential ouster are stirring market anxiety. “Any move to replace Powell could trigger panic in the dollar,” warned Eric Kuby of North Star Investment Management. He added that continued trade tensions without progress on deals could harm the economy further. Meanwhile, China escalated its rhetoric, accusing the U.S. of tariff abuse and warning others against economic deals with Washington.
The dollar sagged close to the decade-low reached the previous day against the Swiss franc, and edged back towards a 3-1/2-year trough versus the euro. Analysts warn that ongoing doubts about the Fed’s independence could keep the dollar under pressure. “The longer this speculation continues, the more vulnerable the USD becomes,” said Joseph Capurso of Commonwealth Bank of Australia, suggesting market turmoil may be needed to halt Trump’s attacks.