The U.S. dollar continued its downward trajectory on Monday, reaching its lowest level in three years. Experts suggest that global investors are retreating from U.S. assets, particularly after President Trump’s criticisms of Federal Reserve Chair Jerome Powell.
On Monday, the ICE U.S. Dollar Index, which measures the currency’s strength against several foreign markets, dropped as low as 97.92. This was the lowest point for the index since March 2022. By 4:08 p.m. EST, the index remained at 98.83 as afternoon trading continued.
Dollar’s Decline Tied to Trump’s Criticism of the Fed
The drop in the dollar’s value has been a gradual process since President Trump’s inauguration in January. The first round of significant dollar-selling occurred shortly after the Trump administration imposed reciprocal tariffs on global trade.
The latest plunge in the U.S. dollar coincides with ongoing attacks on Federal Reserve Chair Powell. On Monday afternoon, President Trump took to his Truth Social platform, calling Powell “Mr. Too Late” and a “major loser.” This tweet, coupled with remarks from White House economic adviser Kevin Hassett, contributed to a 950-point loss for the Dow Jones.
Investor concerns have resurfaced, particularly as the potential removal of Powell raises doubts about the Federal Reserve’s independence and its ability to remain insulated from political pressure.
Trade War and Global Uncertainty Continue to Affect Markets
Beyond the Federal Reserve’s leadership, the ongoing trade tensions with China and the lack of progress on global trade agreements have exacerbated the dollar’s decline. While the U.S. dollar has traditionally held its ground as the global reserve currency, American assets have come under pressure due to the trade war and tariffs.
Several foreign currencies have gained strength against the dollar. The euro, for example, rose by 1.3 percent. This trend has persisted throughout April, with the S&P 500 declining by 9% since April 2, and the Nasdaq falling by nearly 10%.
Investor Sentiment: A Mixed Outlook
Despite these setbacks, some investors remain optimistic about the U.S. stock market. John Stoltzfus, Chief Investment Strategist at Oppenheimer, offered a positive outlook in a Monday note. He described recent pullbacks in the market as “trims” and “haircuts,” rather than signs of a deeper recession. Stoltzfus pointed to the resilience of the broader market and noted that sectors like information technology, financials, industrials, consumer discretionary, and communications services remain strong.
Overall, while investor concerns continue to weigh on the dollar, there’s a mixed sentiment about the broader market. As global trade issues and political rhetoric continue to shape investor decisions, the next few months could prove pivotal for both the U.S. dollar and the global economy.
For more updates on this story, visit DC Brief.
