U.S. Dollar Hits Lowest Level Since 2022 Amid Trump-Fed Tensions

The U.S. dollar experienced a significant decline on Monday, reaching its weakest point since 2022, as global investors exhibited a noticeable retreat from American assets. According to the ICE U.S. Dollar Index, which benchmarks the dollar against a range of foreign currencies, the index plummeted to 97.92, marking the lowest value since March 2022. By 10 a.m. ET, it had fallen further by 1.1% to 98.24. Notably, the dollar’s decline has been observed since President Donald Trump took office in January. The initial drop was linked to the rollout of global reciprocal tariffs on April 2, which spurred additional selling activities. Trump's recent critiques of Federal Reserve Chairman Jerome Powell have exacerbated these declines, prompting the White House economic adviser to suggest that the administration might explore options to replace Powell. Trump's choice of inflammatory terms, calling Powell 'Mr. Too Late' and 'a major loser' on the platform Truth Social, has contributed to a frail economic sentiment. Krishna Guha, vice chairman at Evercore ISI, remarked on CNBC's 'Squawk Box' that market responses indicate a loss of confidence in U.S. economic policymaking. Accompanying this, Andy Laperriere of Piper Sandler warned of the dangers posed by the president's inclination to destabilize Washington, suggesting that investors who disregarded Trump's rhetoric on tariffs faced repercussions. The dollar's status as a global reserve currency is in jeopardy as it struggles against the backdrop of tense U.S. stock and bond markets amid trade conflicts with international leaders. Conversely, key currencies like the euro, which increased by 1.3% against the dollar, alongside the Japanese yen and Swiss franc, illustrated a shift in confidence. With the dollar traditionally regarded as a cornerstone of global finance, its ongoing decline raises pertinent questions about the reliability of U.S. economic policies going forward.