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The dollar fell Monday as investors responded to increasing uncertainty about US economic policies following the attack on President Donald Trump’s Federal Reserve Chairman Jay Powell.
The dollar fell to its lowest in three years against its basket of major trading partners. Gold rose to a fresh record of $3,385 per troy ounce, with the Swiss franc rising 1% against $1 to a 10-year high of SFR 0.8069. Both the euro and yen raised more than 1% against the dollar.
The US sovereign debts have been sold. The 10-year U.S. Treasury yield rose 0.035 percentage points to 4.36%, and 30-year financial yield rose 0.065 percentage points to 4.86%. Bond yields move inversely to the price.
“What we’re looking at is the breakdown between Forex and fees,” said Parisha Saenbi, Asian forex strategist at BNP Paribas. “Yields are moving higher in the US, which also leads to weaker dollars, not your typical relationship.”
“There is a high risk of a recession in the US and concerns about tariffs currently underway, making global investors rethinking their portfolio holdings possible,” Sainbi said, noting that the euro and yen could benefit from investors revitalizing their assets.
“We observed the momentum of the updated outflow within Iflow,” BNY strategist Wee Khoon Chong said of his own banking data.
The move, director of the National Economic Council, Kevin Hassett, said he would “continue to study” the issue of Donald Trump rejecting Federal Reserve Chairman Jay Powell. Trump had claimed Thursday that he had the right to fire Powell.
“If you don’t think it’s acceptable for President Trump to be unhappy with the Fed’s policy history, I think you explained to him to do so,” Hassett told reporters in Washington on Friday.
The Asian trading move on Monday is the first indication of a market response to his comments. Trade has been thin in the region, with Hong Kong and Australian markets closed for Easter Holidays.
The benchmarks for the Japanese and Taiwanese stock markets fell by 1.4% and 1.2% respectively, while China’s CSI 300 rose by 0.2%.
Both S&P 500 and Nasdaq futures fell 0.8%.
Trump repeatedly put pressure on Powell to cut interest rates. The Fed has put on interest rates so far this year after dropping three times in 2024.
The Federal Reserve establishes monetary policy independent of other sectors of the government. According to investors and analysts, attempts to expel Powell, whose term is due to end in May 2026, or pressure monetary policy, could cause disruption to the US market.
