|By Babatunji Wusu-
-Trump’s Criticism of Fed Triggers Dollar Slide
–Analysts Warn of Global Market Fallout as Yen, Euro Gain Strength
The US dollar plunged on Tuesday, hitting a fresh low against the Japanese yen and hovering near multi-year lows against the euro and Swiss franc, following renewed attacks by President Donald Trump on the Federal Reserve.
President Trump ramped up criticism of Fed Chair Jerome Powell, calling him a “major loser” and demanding immediate interest rate cuts to avoid what he warned could be an economic downturn. The President’s verbal offensive sparked concerns about the Fed’s independence, a pillar of US economic stability.
“Lower rates NOW,” Trump posted, igniting fears of political interference in monetary policy.
The fallout was immediate. The dollar dropped 0.35% to 140.40 yen, dipping below the psychological 140 mark for the first time since mid-September. It also hovered near decade-low levels against the Swiss franc, trading at 0.8103, close to Monday’s 0.8042, the weakest since 2014.
Market analysts said Trump’s pressure on the Fed, combined with escalating trade tensions and rising tariffs, has left the dollar in a vulnerable state. Fears over the dollar’s role as a global reserve currency mounted, with some analysts warning of potential divestments from US assets due to perceived instability.
Concerns deepened after Thailand’s Prime Minister announced a postponement of trade talks with Washington, a move that further eroded investor confidence in the US economy.
Meanwhile, China fired back at the US, accusing Washington of “abusing tariffs” and warning other nations against engaging in trade deals that come at their expense — a move analysts see as inflaming the ongoing US-China trade war.
The euro eased to $1.1498, a slight decline from Monday’s high of $1.1573, the strongest since November 2021. Sterling gained 0.12% to $1.3390, while the Australian dollar, often sensitive to global risk sentiment, jumped to a four-month peak of $0.64385.
The dollar’s decline was further fueled by last week’s European Central Bank policy meeting, where dovish signals led investors to increase their bets on rate cuts by year-end — raising expectations from 55 to 65 basis points of monetary easing.
“It may take another sell‑off in the US government bond or equity markets to encourage President Trump to refrain from such comments,” said Joseph Capurso, Head of International and Sustainable Economics at Commonwealth Bank of Australia.
As the pressure mounts on the US central bank and geopolitical tensions rise, markets remain on edge, bracing for further volatility in global currency and trade flows.
