Forex Today: US Dollar Struggles as Trump-Powell Feud Intensifies

Forex Today: US Dollar Struggles as Trump-Powell Feud Intensifies

The US Dollar (USD) remains vulnerable as the new week begins with heightened political tension. After suffering broad-based losses on Monday, the Dollar failed to stage a convincing rebound early Tuesday, reflecting the weight of deepening strain between President Donald Trump and Federal Reserve Chairman Jerome Powell.

Tension Clouds Market Direction

The Dollar Index (DXY) has hovered near monthly lows, pressured by President Trump’s renewed public criticism of Powell. Reports suggest the President has privately expressed interest in removing Powell, though formal steps remain unclear.

The lack of clarity is unsettling markets. The Fed’s independence—a cornerstone of monetary stability—is being openly questioned, and investors are becoming more cautious in holding USD-denominated assets.

Market Sentiment Stays Defensive

Currency traders are reluctant to position too aggressively on the USD while political uncertainty grows. With Powell resisting pressure to cut rates aggressively, and Trump seeking looser monetary policy ahead of the election season, the ongoing feud is injecting risk into Fed policy expectations.

Despite some resilience in early Tuesday trading, forex participants remain defensive, awaiting further developments from the White House or potential clarification from the Federal Reserve.

Key Market Insights:

• USD weak after sharp drop on Monday
• Trump-Powell tension resurfaces, shaking Fed credibility
• Market questions Fed independence and policy path
• Investors wary of long-USD positions ahead of more headlines

Related on Tredu.com:

• Fed Watch: How Powell’s Position Affects the Dollar
• US Political Risk: Why It Matters to Forex Markets
• Dollar Index (DXY) Live Trends and Support Levels
• Top Forex Pairs to Watch Amid US Political Unrest