Dollar hits three-year low as Trump attacks threaten Fed’s independence

NEW YORK – The dollar tumbled on Monday to its lowest level in three years as investor confidence in the US economy took another hit over President Donald Trump’s attacks on the Federal Reserve chairman, potentially putting the central bank’s independence under threat.

Trump ramped up his criticism of Fed Chair Jerome Powell on Monday via social media, calling him a “major loser” and demanding that he lower interest rates immediately.

Against a basket of currencies, the dollar slid as low as 97.923 on Monday, its lowest since March 2022. The currency also fell to a decade-low against the Swiss franc, while the euro broke above USD 1.15.

White House economic adviser Kevin Hassett said on Friday that the president and his team were continuing to study whether they could fire Powell, just a day after Trump said Powell’s termination “cannot come fast enough” as he called for the Fed to cut interest rates.

Trading was thin with most European markets and those in Australia and Hong Kong closed for Easter Monday. Most markets globally were closed on Friday for a holiday.

US stocks suffered steep losses on Monday after Trump’s social media post about Powell, with all three major indexes down more than 2%, and steep losses in the “Magnificent Seven” group of megacap growth stocks weighing heaviest on the tech-heavy Nasdaq.

“Powell does not report directly to Trump, so (Trump) cannot actually fire him. He can only be removed from office under certain procedures, which one would think have a higher barrier,” said Vishnu Varathan, head of macro research for Asia ex-Japan at Mizuho. “But can the president move the cogs and wheels to undermine the perceived independence of the Fed? Sure, he could.”

Against the Swiss franc, the dollar sank more than 1.5% to a 10-year trough of 0.8063, while the euro peaked at USD 1.1535, its highest since November 2021.

The dollar also hit a seven-month low against the yen, and was last at 140.66. CFTC data showed net-long positions on the Japanese yen hit a record high for the week ended April 15.

“If the central bank’s dual mandate — preserving price stability and fostering full employment — is diluted with a new set of objectives defined by the White House, policymakers could find themselves unable to tighten policy dramatically in the face of a sudden increase in prices,” said Karl Schamotta, chief market strategist at Corpay in Toronto, in a research note.

Sterling rose to its highest since September at USD 1.34, while the Australian dollar scaled a four-month high of USD 0.6430. The New Zealand dollar reclaimed the USD 0.6000 level for the first time in more than five months.

“It’s really a buffet for any dollar bear… from the heightened uncertainty around the self-harm from tariffs to the loss of faith even prior to the Powell news,” Varathan said.

Trump’s sweeping tariffs and uncertainty over his trade policies have sent global markets into a tailspin and darkened the outlook for the world’s largest economy, in turn weakening the dollar as investors pull money out of US assets.

Elsewhere, the onshore yuan rose to a two-week high before paring some of those gains. Its offshore counterpart was last at 7.2931 per dollar.

China on Monday kept its benchmark lending rates steady for the sixth successive month, matching expectations. But markets are betting on more stimulus being rolled out soon in the face of the escalating China-US trade war.

(Reporting by Hannah Lang in New York and Rae Wee in Singapore; Editing by Marguerita Choy and Jane Merriman)

Dollar would be biggest casualty if Trump fires Fed Chair: McGeever

ORLANDO, Florida – If US President Donald Trump wants a weaker dollar, threatening to fire Federal Reserve Chair Jerome Powell is a sure-fire way of getting it. But rarely in markets, economics and policymaking has the phrase “be careful what you wish for” ever been more apt.

Trump’s frustration with Powell for not lowering interest rates goes back to his first term in the White House, but his latest verbal attacks mark an escalation that could quickly turn a dollar slump into a potentially catastrophic rout.

That’s not hyperbole. The dollar is down 9% this year and has lost almost 6% of its value this month alone, a slide that accelerated when Trump’s “Liberation Day” tariffs threw markets into a downward spiral of uncertainty and confusion.

The dollar’s decline this year has wiped out all of last year’s gains, which is quite a feat considering the tsunami of capital inflows as investors around the world plowed trillions into Wall Street on the back of the “US exceptionalism” story.

Measured against a basket of major currencies, the dollar is on track for its steepest monthly decline since the Global Financial Crisis of 2007-09, and its eighth biggest since the era of free-floating exchange rates was introduced more than 50 years ago.

Excluding the GFC, the last time the dollar fell this much in a calendar month was in 1985, just before five countries agreed to weaken what was legitimately an overvalued dollar via the famed “Plaza Accord” in September of that year.

The scale of dollar selling underway now is historic, and worryingly for policymakers, it appears to be rooted in concern about the direction and credibility of US policymaking.

There’s almost nothing that could undermine credibility in a country’s economic policymaking – and its currency – more than forcibly removing the head of the central bank: Even in the United States and even the dollar. Or perhaps, especially in the US and especially the dollar, because of the outsized role both play in the global financial system.

Former Boston Fed President Eric Rosengren put in plainly on Monday when he wrote on the social media platform X: “Unless the goal is to make the US trade like a third-world country, threatening federal reserve independence only makes the US less attractive to foreign investors.”

POLYMARKET ODDS

Of course, the doomsday scenario may be avoided. Trump could back down or soften his stance, Powell might decide to voluntarily step down to limit the damage, or markets could take the view that his replacement may not be so bad after all. But right now, there’s little to suggest any of those scenarios will play out.

In the near term, Powell’s exit would probably prompt an immediate, dovish repricing of the Fed’s rate outlook.

Traders currently expect the Fed to cut interest rates by 100 basis points this year to 3.25-3.50%, but that’s with Powell attempting to balance growth concerns with any rising price pressures. A Fed more in tune with Trump’s thinking would tilt that balance in the direction of more easing.

But that’s only part of the story because continued dollar weakness wouldn’t be welcomed by other countries, whose currencies would be rising in value against the greenback. Moreover, shattered faith in the dollar would risk unleashing tremors that could rip through global markets in unexpected ways. Official intervention would surely come at some point.

But would it succeed?

“Fending off a speculative attack (on the dollar) would be challenging,” warns economist Phil Suttle, even for the Fed, as US rates would probably be falling in such a fevered “risk off” environment.

Redrawing the world’s economic architecture is one of Trump’s economic goals. Political interference in the central bank, unmooring inflation expectations and torpedoing the world’s faith in the dollar would certainly do that, but it’s a high price to pay.

Online prediction market Polymarket is currently attaching a 19% chance to Powell getting fired by the end of this year, up from around 15%, where it has hovered for most of this year, but down from as high as 23% last week. Unless Trump has a sudden change of heart, this probability – and pressure on the dollar – is likely to rise.

(The opinions expressed here are those of the author, a columnist for Reuters.)

(By Jamie McGeever; Editing by Aurora Ellis)

Dollar weakens on concerns about Fed’s independence under Trump

SINGAPORE – The dollar tumbled on Monday as investor confidence in the US economy took another hit over President Donald Trump’s plans to shake up the Federal Reserve, which would throw into question the independence of the central bank.

White House economic adviser Kevin Hassett said on Friday that the president and his team were continuing to study whether they could fire Fed Chair Jerome Powell, just a day after Trump said Powell’s termination “cannot come fast enough” as he called for the Fed to cut interest rates.

The dollar sank to a three-year low against the euro, hit a seven-month trough on the yen and slid 0.9% against the Swiss franc early in the Asian session on Monday, as an ongoing crisis of confidence in the greenback continued to play out.

Trading was thinned with markets in Australia and Hong Kong closed for Easter Monday. Most markets globally were closed on Friday for a holiday.

“Powell does not report directly to Trump, so (Trump) cannot actually fire him. He can only be removed from office under certain procedures which one would think have a higher barrier… but can the president move the cogs and wheels to undermine the perceived independence of the Fed? Sure, he could,” said Vishnu Varathan, head of macro research for Asia ex-Japan at Mizuho.

“I would argue that they don’t even need to sack Powell immediately. You just need to create the perception that you could fundamentally change the view of an independent Fed.”

The euro scaled a three-year top of USD 1.1476, while the dollar last traded 0.58% lower at JPY 141.40.

The sterling peaked at USD 1.3339, its highest since October 1, while the Australian dollar hit a two-month top of USD 0.6396.

“It’s really a buffet for any dollar bear… from the heightened uncertainty around the self-harm from tariffs to the loss of faith even prior to the Powell news,” Varathan said.

Against a basket of currencies, the dollar slid to a three-year low of 98.623 on Monday.

The greenback was down 0.9% against the Swiss franc at 0.8119, while the New Zealand dollar rose 0.46% to USD 0.5964.

Elsewhere, the offshore yuan was up roughly 0.1% at 7.2966 per dollar.

China is widely expected to leave its benchmark lending rates unchanged at the monthly fixing later on Monday, but markets are wagering on more stimulus being rolled out soon in the face of an escalating Sino-US trade war.

(Reporting by Rae Wee; Editing by Jamie Freed)

Oil prices fall as progress in US-Iran talks eases supply concerns

SINGAPORE – Oil prices fell about 1% on Monday after nuclear talks between the United States and Iran progressed, reducing the concerns that the dispute will reduce supply from the major Middle Eastern producer.

Brent crude futures slipped 70 cents, or 1.03%, to USD 67.26 a barrel at 0030 GMT after closing up 3.2% on Thursday. US West Texas Intermediate crude was at USD 64 a barrel, down 68 cents, 1.05%, after settling up 3.54% in the previous session. Thursday was the last settlement day last week because of the Good Friday holiday.

The US and Iran agreed on Saturday to begin drawing up a framework for a potential nuclear deal, Iran’s foreign minister said, after talks that a US official described as yielding “very good progress.”

The progress on the nuclear discussions follows further sanctions by the US last week, including against a China-based teapot oil refinery that it alleges processed Iranian crude, ramping up pressure on Tehran amid the talks. Teapot is an industry term for smaller, independent processors.

Concerns about tightening Iranian oil supply and hopes for a trade deal between the United States and the European Union, pushed both Brent and WTI up about 5% last week, their first weekly gain in three weeks.

Separately, Russia and Ukraine blamed each other on Sunday for breaking a one-day Easter ceasefire declared by President Vladimir Putin, with both sides accusing the other of hundreds of attacks and the Kremlin saying there was no order for a ceasefire extension.

(Reporting by Florence Tan; Editing by Christian Schmollinger)

Gold climbs as softer dollar, tariff tensions buoy demand

Gold prices gained on Tuesday, helped by safe-haven demand as US President Donald Trump’s uncertain tariff plans kept investors on edge, while an overall weaker dollar also lent support.

Spot gold was up 0.6% at USD 3,230.18 an ounce as of 1:47 p.m. ET (1747 GMT). Bullion hit a record high of USD 3,245.42 on Monday.

US gold futures rose 0.4% to settle at USD 3,240.40.

“Traders are waiting for the next major fundamental development to drive the gold market, but the charts remain bullish. There’s still safe-haven demand,” said Jim Wyckoff, senior analyst at Kitco Metals.

Federal Register filings on Monday showed the US administration is advancing investigations into pharmaceutical and semiconductor imports in a bid to impose tariffs.

Trump said on Sunday he would announce the tariff rate on imported semiconductors over the next week.

The price of gold, a safe haven during times of political and financial uncertainty, has risen over 23% so far in 2025 and scaled multiple record highs.

“The rise in the gold price is also partly in line with the continuing weakness of the dollar, which points to a gradual erosion of the US currency’s status as a safe asset – gold is likely to be an alternative for many USD investors,” Commerzbank said in a note.

“The short-term monetary policy outlook is providing further support for gold.”

The dollar neared a three-year low against its rivals, making gold more attractive for other currency holders.

Financial markets expect the Federal Reserve to resume cutting interest rates in June after pausing in January, and reduce its policy rate by 100 basis points this year.

Investors now await comments from Fed Chair Jerome Powell, who is scheduled to speak on Wednesday, for more clues on the interest rate path.

Elsewhere, spot silver eased 0.1% to USD 32.32 an ounce and platinum rose 0.9% to USD 959.75, while palladium gained 1.7% to USD 972.57.

(Reporting by Brijesh Patel and Ishaan Arora in Bengaluru; Editing by Susan Fenton, Shreya Biswas, and Richard Chang)

Wall Street ends down slightly; tariff uncertainty keeps investors on edge

NEW YORK – US stocks ended slightly lower on Tuesday as tariff uncertainty stayed high and shares of consumer and healthcare companies eased, while upbeat results from banks provided some support.

Shares of Bank of America and Citigroup rose following their results.

Still, bank executives warned that US consumer spending faces huge risks if the upheaval sparked by President Donald Trump’s trade policy goes on.

Among the biggest weights on the Dow was Boeing. The stock fell 2.4% after Bloomberg reported, citing people familiar with the matter, that China has ordered its airlines not to take further deliveries of Boeing jets in response to the US decision to impose 145% tariffs on Chinese goods.

Federal Register filings on Monday showed the Trump administration was also proceeding with probes into imports of pharmaceuticals and semiconductors, as part of a bid to impose tariffs on the sectors.

Trump’s April 2 announcement of sweeping tariffs sparked turmoil in the market and fueled worries about a global trade war and possible recession. Trading has been more subdued this week, but investors have been unable to focus on much else.

“Earnings have been pretty good, but this is a market that’s just beset by tariff and trade uncertainty and those are really the only catalysts that matter at this point,” said Ross Mayfield, investment strategist at Baird in Louisville, Kentucky.

“On a day where you’re bereft of those (catalysts), it’s kind of a wayward market, and we’re seeing that today.”

Johnson & Johnson’s shares ended down 0.5% after the company missed estimates for sales of medical devices, despite beating Wall Street estimates for first-quarter revenue and profit.

Barclays on Tuesday downgraded the US auto and mobility sector, saying Trump’s tariffs could pressure automakers’ earnings. Shares of Ford closed down 2.7% while shares of General Motors fell 1.3% and the S&P consumer discretionary index slipped 0.8%.

The Dow Jones Industrial Average fell 155.83 points, or 0.38%, to 40,368.96, the S&P 500 lost 9.34 points, or 0.17%, to 5,396.63 and the Nasdaq Composite lost 8.32 points, or 0.05%, to 16,823.17.

Also in the healthcare space, shares of Merck & Co. ended 1% lower.

Bank of America topped estimates for first-quarter profit as interest income grew, and its shares ended up 3.6%.

S&P 500 companies have just begun to report results for the quarter ended March 31, but changes in US trade policy are muddying the outlook, and executives could be reluctant to give earnings guidance.

“As far as the results from Q1, those basically occurred in a world that doesn’t really exist anymore,” Mayfield said. “It’s going to be about guidance, and I expect a lot of companies to just kind of punt and rescind their guidance.”

Johnson & Johnson’s chief executive said that tariffs on pharmaceuticals can create supply-chain disruptions and that favorable tax policies would be a more effective tool to boost US manufacturing capacity of both drugs and medical devices.

Strategists are also paying close attention to their technical charts after the S&P 500’s 50-day moving average slipped below the 200-DMA on Monday, producing a “death cross” pattern that suggests a short-term correction could turn into a longer-term downtrend.

The S&P 500 remains down 12.2% from its February 19 record-high close and down about 8% for the year to date.

Advancing issues outnumbered decliners by a 1.29-to-1 ratio on the NYSE. There were 49 new highs and 67 new lows on the NYSE.

On the Nasdaq, 2,399 stocks rose and 2,003 fell as advancing issues outnumbered decliners by a 1.2-to-1 ratio.

The S&P 500 posted 2 new 52-week highs and one new low, while the Nasdaq Composite recorded 27 new highs and 95 new lows.

Volume on US exchanges was 15 billion shares, compared with the roughly 19 billion average for the full session over the last 20 trading days.

(Reporting by Caroline Valetkevitch in New York; Additional reporting by Lisa Mattackal and Purvi Agarwal in Bengaluru; Editing by Shinjini Ganguli and Matthew Lewis)

Dollar gains on euro, yen, but tariffs keep investors cautious

NEW YORK – The dollar rose against the euro and yen on Tuesday, showing tentative signs of recovery following a sharp selloff that saw the dollar index tumble more than 3% last week.

Investors nonetheless remain cautious on concerns about the impact of US President Donald Trump’s trade tariffs on the US economy.

Rapid shifts in tariff announcements have reduced faith in US policymakers and led investors to seek calmer waters outside of the United States, which last week sent Treasury yields sharply higher and dented the appeal of the greenback.

“The dollar has been primarily driven by asset flows rather than traditional short-term drivers such as rate differentials,” said Vassili Serebriakov, FX and macro strategist at UBS, adding that “it does appear that the market is driven by a rethink of US exceptionalism.”

Factors driving the move away from the US include “the slowdown in the US economy, uncertainty about tariffs, broader US policy uncertainty, improved sentiment towards Europe, rotations out of US tax, things like that,” Serebriakov said.

Data on Tuesday showed that US import prices unexpectedly fell in March, pulled down by decreasing costs for energy products, the latest indication that inflation was subsiding before Trump’s sweeping tariffs came into effect.

Trading this week has so far been relatively calm but investors remain cautious as they wait on further tariff clarity.

“Last week was all about deleveraging, liquidation, and asset re-allocation out of US assets. This week’s tone is calmer in what is a holiday-shortened week,” said Prashant Newnaha, senior Asia-Pacific rates strategist at TD Securities.

Most US markets will be closed for this week’s Good Friday holiday though foreign exchange will remain open.

The euro was last down 0.70% on the day at USD 1.127, after last week reaching a three-year high at USD 1.1473.

Euro/dollar is one of the most overvalued currency pairs, showing that the single currency is acting as “the preferred channel for loss of confidence in the dollar,” ING analysts Francesco Pesole and Benjamin Schroeder said in a note.

The shift from US to European assets, combined with the diminished safe-haven appeal of the dollar, may continue to justify the euro’s overvaluation, they added.

German investor morale in April posted its strongest decline since Russia invaded Ukraine in 2022 due to uncertainty unleashed by US tariffs, data showed on Tuesday.

Eurozone banks also curbed firms’ access to credit last quarter and expect to keep tightening credit standards due to increasing concerns about the economic outlook, the European Central Bank’s lending survey showed.

The ECB is expected to cut rates by 25 basis points when it concludes its two-day meeting on Thursday.

The dollar gained 0.12% against the Japanese yen to 143.16 yen per dollar, not far off Friday’s six-month low of 142.05.

Japan will seek full removal of additional tariffs imposed by Trump, its top negotiator, Ryosei Akazawa, said on Tuesday, ahead of his scheduled three-day visit to Washington.

The dollar gained 0.91% to 0.822 Swiss francs after slumping to a 10-year low against the Swiss currency last week.

Sterling was up 0.15% at USD 1.3209 after earlier reaching USD 1.3252, the highest since October 3.

The Australian dollar rose 0.32% to USD 0.6345 and the New Zealand dollar rose 0.39% to USD 0.5899 and earlier reached USD 0.5943, its highest since November 13.

In cryptocurrencies, Bitcoin fell 0.52% to USD 84,436.

(Reporting by Karen Brettell; Additional reporting by Ankur Banerjee and Amanda Cooper; Editing by Shri Navaratnam, Kim Coghill, Joe Bavier, Giles Elgood, Franklin Paul, and Sandra Maler)

Global investors dump US stocks at record pace, BofA survey says

LONDON – Global investors have slashed their holdings of US stocks by a record amount in the past two months, a trend that is likely to continue given that a record number of managers say they plan to keep cutting their exposure, BofA Global Research said on Tuesday.

Respondents to BofA’s monthly survey of fund managers were a net 36% underweight in US equities, the most in nearly two years, a number that has plunged by 53 percentage points since February, the biggest such fall on their records.

A majority think a trade war that triggers a global recession is the biggest risk for markets, according to the survey.

US President Donald Trump’s aggressive tariff plans have sparked a selloff in US assets, including stocks, the dollar and Treasury bonds. The market rebounded on Monday, but the broad-market S&P 500 index is still down about 8% so far this year.

BofA polled 164 investors with USD 386 billion of assets under management.

There were further signs of nervousness in the survey, particularly about U.S assets.

A net 42% of investors said they expected a global recession, the most since June 2023 and the fourth-highest level in the past 20 years.

In addition, 73% said they thought the theme of “US exceptionalism” has peaked – the idea has powered markets in recent months – and relatedly 49% said they thought the most crowded trade in markets was now “long gold”, displacing bets on US tech giants for the first time in 24 months.

A net 61% expect the US dollar to depreciate over the next 12 months, the most since May 2006. The currency has tumbled sharply against most others in the past few weeks, with the euro, Japanese yen and Swiss franc all gaining sharply.

(Reporting by Alun John; Editing by Amanda Cooper and Hugh Lawson)

US Treasury secretary: no risk of China weaponizing Treasuries despite bond market volatility

US Treasury Secretary Scott Bessent, in an interview with Yahoo Finance on Tuesday, dismissed concerns over China weaponizing its Treasuries despite bond market volatility and added there was no risk of China potentially using its robust Treasury pile to inflict economic pain on the United States.

“If Treasuries hit a certain level or if the Federal Reserve believed that a foreign — I won’t call them an adversary — but a foreign rival were weaponizing the US government bond market or attempting to destabilize it for political gain, I am sure that we would do something in conjunction with each other, but we just haven’t seen that,” Bessent said. “We have a big tool kit.”

China is the second-biggest foreign holder of US government debt after Japan, holding almost USD 761 billion of bonds in January.

“If they (China) sell Treasuries, then they would have to buy RMBs, and it would strengthen their currency. And they’ve been doing just the opposite,” Bessent said, adding that it is not in China’s best economic interests to sell.

US President Donald Trump has slapped tariffs of 145% on Chinese goods this year as part of broader reciprocal duties on all US trading partners. That prompted ridicule and criticism from Beijing, which retaliated by jacking up levies on US goods to 125%.

Beijing has called Trump’s tariffs strategy “a joke,” which irritated Bessent.

“These are not a joke. I mean these are big numbers,” Bessent has previously said in a Bloomberg Television interview.

Any US-China negotiations would have to come from “the top,” involving Trump and Chinese President Xi Jinping, Bessent added.

(Reporting by Mrinmay Dey in Bengaluru; Editing by Matthew Lewis)

Global bond funds log biggest weekly outflows in over five years

Global bond funds saw their largest weekly outflow in over five years in the week to April 9, as investors pulled back even from traditionally safer bonds amid recession fears and an escalating US-China trade war that are stoking concerns over inflation in the United States.

According to LSEG Lipper data, investors withdrew a net USD 25.71 billion from global bond funds during the week, the biggest amount for a week since April 1, 2020.

US Treasuries saw heavy selling this week after President Donald Trump escalated the trade war with China, lifting tariffs on Chinese imports on Wednesday to an effective rate of 145% and fuelling concerns that Beijing could raise its own duties. China did take that step on Friday, hiking its tariffs on US imports to 125%.

The benchmark 10-year US treasury yield has so far increased about 45.5 basis points to 4.45% this week, the biggest increase in a week since November 2001.

Some analysts said the selloff in US bonds signals a shift in global confidence, with Treasuries, long seen as the bedrock of the financial system, coming under strain from rising geopolitical tensions and doubts over US financial dominance.

By region, investors pulled a net USD 15.64 billion from US bond funds in the week to April 9, logging the biggest weekly net sales in over 27 months. Investors also ditched USD 12.72 billion worth of European funds, while Asian funds saw about USD 289 million worth of net inflows.

The high-yield bond funds and loan participation funds saw intense selling pressure as investors divested these funds to the tune of USD 15.92 billion and USD 6.69 billion respectively during the week.

Safe-haven money market funds saw a second straight week of net inflows, drawing in USD 25.8 billion.

Investors also pulled USD 10.7 billion from global equity funds amid sharp market volatility.

Sectoral equity funds posted record weekly outflows, led by financials, healthcare, and tech, which saw net redemptions of USD 3.23 billion, USD 1.21 billion,n and USD 867 million, respectively.

At the same time, gold and precious metals funds saw net inflows of USD 1.03 billion, marking their ninth straight week of gains.

Among emerging market funds, equity and bond funds logged their biggest weekly outflows in over four months, at USD 4.9 billion and USD 3.6 billion, respectively.

(Reporting by Gaurav Dogra and Patturaja Murugaboopathy in Bengaluru; Editing by Frances Kerry)

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