U.S. Dollar falls amid fears over Trump's threat to undermine the Fed

On Monday, the U.S. dollar lost value as investors grew concerned over comments from the White House hinting at a possible shake-up at the Federal Reserve. These remarks have raised doubts about the future independence of the central bank.

At 08:55 ET (14:55 GMT), the U.S. dollar index—measuring the dollar against a basket of other currencies—dropped by 1.2% to 98.21, following an earlier drop to a three-year low of 98.164.

The dollar fell by 1.4% against the Swiss franc, reaching 0.8048, while the euro gained 1.3% to 1.1542. The dollar also hit a seven-month low versus the Japanese yen. Meanwhile, the British pound reached its highest level since September and the Australian dollar climbed to a four-month peak.

Trading was light on Monday as many European markets, along with those in Hong Kong and Australia, were closed for Easter Monday, and most markets were shut on Friday for the holiday.

White House economic adviser Kevin Hassett indicated that President Trump and his team are considering whether to remove Fed Chair Jerome Powell from his position, accusing him of not lowering interest rates quickly enough. Last week, Powell stated that the Fed was unlikely to cut rates soon due to potential inflationary pressures and economic uncertainties caused by new tariffs.

Meanwhile, the onshore Chinese yuan (USD/CNY) also fell, and the offshore USD/CNH pair dropped by 0.2%.

The People’s Bank of China kept its benchmark Loan Prime Rate (LPR) unchanged on Monday. The one-year LPR remained at 3.1%, and the five-year LPR, which influences mortgage rates, stayed at 3.6%. This decision suggests that Beijing may prefer to stimulate growth through fiscal policies rather than further monetary easing.