Dollar in Decline: Is Trump’s Pressure on Powell Sinking the U.S. Currency?

On April 21, the U.S. dollar took a sharp hit — the DXY index fell to 97.92, marking its lowest level in the past three years, according to CNBC.

Trump’s sharp rhetoric rocks the market

U.S. President Donald Trump slammed Federal Reserve Chairman Jerome Powell, calling him “Mr. Too Late” and a “major failure,” demanding an immediate cut in interest rates.

“Many are calling for rate cuts in advance. Energy prices and many goods have already dropped significantly — inflation is nearly gone. If we don’t act now, the economy will slow down,” said Trump.

He pointed out that the European Central Bank has already lowered rates seven times, while Powell has hesitated.

What is the DXY and why does it matter?

The DXY index measures the value of the U.S. dollar against six major currencies: the euro, yen, pound sterling, Canadian dollar, Swedish krona, and Swiss franc. The 97.92 mark is the lowest since March 2022.

Analysts believe this drop is linked to policy uncertainty, tension between the White House and the Fed, and a decline in investor confidence.

Investors rush to gold

Amid market instability, investors are turning to safe-haven assets, especially gold, which on April 21 surpassed $3,400 per ounce for the first time in history.

Krishna Guha, vice chairman of Evercore ISI, stated:

“We’re seeing a clear signal from the market. Even the mere suggestion that the president might replace the Fed chair is concerning. The drop in the dollar combined with a rise in long-term Treasury yields is unusual. It shows global investors are pulling capital out of the U.S.”

Trump calls for Powell’s resignation

Last week, Trump again criticized Powell, saying he should have cut rates “a long time ago” and called for his resignation.

Andy Laperriere, an analyst at Piper Sandler, commented:

“Investors who ignored Trump’s remarks on tariffs made a mistake. The same goes for ignoring his broader economic comments — it would be foolish.” Read 'Zamin' on Telegram!