Dollar plummets to lowest level since 2022 after Trump's threats to oust Fed Chief

The US dollar tumbled to its lowest level in three years after President Donald Trump castigated the Chairman Central Bank of America, resulting in the loss of investors’ trust in the US economy and raising concerns about the central bank’s independence. 

Trump criticised the Federal Reserve’s chairman Jerome Powell in a social media post on Monday, calling him a “major loser” and urging for the lowest interest rates immediately.

According to reports, following the mishap, the US dollar plummeted up to $97.923 against several currencies, the lowest since March 2022, while fell to a decade-low against Swiss franc. 

Similarly, the remarks brought the euro up to $1.15. 

The decline occurred as the White House considered firing Federal Reserve Chair Powell.

Economic adviser Kevin Hassett maintained that the instabiblity in US economy occured after Trump expressed frustration with the Fed's interest rate policies and called for Powell's removal. 

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He also saw holiday closures in many markets as a cause of slower trading activity.

US stocks plummeted on Monday following a social media post by Trump targeting Fed Chair Powell, with all three major indexes dropping over 2%.

The tech-heavy Nasdaq was particularly hard hit, dragged down by significant losses in the "Magnificent Seven" megacap growth stocks.

"Powell does not report directly to Trump, so (Trump) cannot fire him. He can only be removed from office under certain procedures, which one would think have a higher barrier," Reuters quoted 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," Varathan added.

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According to Commodity Futures Trading Commission (CFTC) data, investors built up a record net-long position in the yen for the week ending April 15, indicating a significant shift in market sentiment. Notably, the dollar slumped to a seven-month low against the yen, trading at 140.66.

China maintained its benchmark lending rates steady for a sixth month, meeting market expectations. Yet, traders expect additional stimulus actions to counter the growing pressure from the China-US trade conflict.