Trump’s Fed Attacks Weigh on Dollar as Currency Hits Multi-Year Lows

The U.S. dollar remained near its lowest level in three years on Tuesday, pressured by President Donald Trump’s escalating attacks on Federal Reserve Chair Jerome Powell, which have deepened investor concerns over U.S. monetary policy and economic stability.

Trump lashed out on Truth Social, labeling Powell a “major loser” and demanding immediate interest rate cuts to avoid an economic slowdown. His criticism followed White House economic adviser Kevin Hassett’s statement that the administration is reviewing whether Powell can be removed—intensifying fears about the Fed’s independence.

The dollar index, which tracks the greenback against six major currencies, slipped to 98.454 after touching 97.923—its weakest since March 2022. The dollar dipped to 0.8095 Swiss franc, nearing the previous session’s decade-low of 0.8042, and held at 140.99 yen, just above Monday’s seven-month low of 140.48. The euro stood firm at $1.1502 after hitting $1.1573, its highest since November 2021.

Concerns about Trump undermining central bank credibility, combined with prolonged U.S.-China trade tensions, have further dampened sentiment. China recently accused Washington of tariff abuse and warned other nations against aligning economically with the U.S. at their expense.

Analysts warn that continued uncertainty around U.S. monetary policy could prompt further dollar weakness. “The longer doubts about Fed independence persist, the greater the risk to the dollar,” said Commonwealth Bank’s Joseph Capurso, adding that a sharp correction in U.S. bonds or equities might be needed to shift Trump’s tone.

The risk-sensitive Australian dollar also gained ground, climbing to a four-month high of $0.6436 on Monday and hovering at $0.6414 in recent trading. Investors remain on edge as political pressure on the Fed and trade disputes continue to cloud the U.S. economic outlook.