The US dollar slumped hard on the 21st of April, 2025, reflecting growing investor doubt about the stability of the American economy amid President Donald Trump’s fresh push to shake up the Federal Reserve.
Just days earlier, White House economic adviser Kevin Hassett confirmed that Trump and his team were exploring ways to “fire Federal Chair Jerome Powell,” following the president’s blunt remark that Powell’s removal “cannot come fast enough” and his demand for a rate cut from the Fed.
Reports showed the greenback dropped to a 10-year low against the Swiss franc, hit a seven-month low versus the yen, and slid against the euro, which surged to a three-year high all signs of a continued loss of faith in the dollar.
Trading volumes were thinner than usual due to the Easter Monday holiday that kept markets in Australia and Hong Kong shut. Globally, most markets had already been closed the on the 18th of April, 2025.
The legal road to firing Powell is steep.
“Powell does not report directly to Trump, so (Trump) cannot actually fire him. He can only be removed from office under certain procedures which one would think have a higher barrier… but can the president move the cogs and wheels to undermine the perceived independence of the Fed? Sure, he could,” said Vishnu Varathan, head of macro research for Asia ex-Japan at Mizuho.
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“I would argue that they don’t even need to sack Powell immediately. You just need to create the perception that you could fundamentally change the view of an independent Federal,” he added.
Currency charts told the story:
• Euro peaked at $1.153275
• Dollar sank to 0.80695 francs
• Down 1.1% at 140.63 yen
• Pound rose past $1.3380
• Aussie dollar reached $0.64015, a two-month high
“It’s really a buffet for any dollar bear… from the heightened uncertainty around the self-harm from tariffs to the loss of faith even prior to the Powell news,” Varathan said.
Trump’s aggressive trade measures and unpredictability have only added fuel to the fire, pushing investors away from US assets and shaking confidence in the world’s largest economy.