The US dollar hit a three-year low as confidence in the Fed's independence wavered.

The US dollar fell sharply in Asian trading on Monday as investor confidence in the US economy continued to be affected by President Donald Trump's plan to reform the Fed, which would raise questions about the central bank's independence.

White House economic adviser Kevin Hassett said last Friday that the president and his team are continuing to study whether they can fire Federal Reserve Chairman Jerome Powell, just one day after Trump said that firing Powell “cannot happen quickly enough,” as he urged the Fed to cut interest rates.

“Powell doesn’t report directly to Trump, so (Trump) can’t really fire him. He can only be removed through certain procedures that are thought to have higher hurdles… but could the president move the gears and wheels to undermine the Fed’s supposed independence? Certainly,” said Vishnu Varathan, head of Asia excluding Japan macro research at Mizuho.

"I think they don't even need to fire Powell immediately. You just need to create the perception that you can fundamentally change the view on an independent Fed," he added.

This further eroded investor confidence in the US economic outlook and pushed US assets to continue their decline. The USD Index – a measure of the dollar's strength against six other major currencies – fell to its lowest level in three years at 98.61 on Monday.

The euro rose to a three-year high of $1.1476, while the dollar last traded 0.58% lower at 141.40 yen.

Accordingly, the US dollar fell to its lowest level in three years against the euro at $1.1476. The greenback also declined 0.58%, hitting a seven-month low against the yen at 141.40 JPY/USD; and fell 0.9% against the Swiss franc at $0.8119/CHF.

While the British pound rose to its highest level since October 1, 2024, at $1.3339; the Australian dollar also reached a two-month high of $0.6396; and the New Zealand dollar increased by 0.46% to $0.5964.

Trading volume decreased as markets in Australia and Hong Kong closed for the Easter holiday. Most global markets had already closed on Friday for the holiday.

"This is truly a buffet for any dollar speculator... from the increased uncertainty surrounding self-harm from tariffs to the loss of confidence even before the Powell news," Varathan said.

Trump's sweeping tariffs and uncertainty surrounding his trade policy have sent global markets plummeting and darkened the outlook for the world's largest economy, thereby weakening the dollar as investors withdrew money from US assets.

The offshore yuan rose by about 0.1% to 7.2966 yuan/USD.

China is widely expected to keep its benchmark lending rate unchanged at its monthly meeting late Monday, but markets are betting on more stimulus measures to be rolled out soon amid escalating US-China trade tensions.

Source: https://thoibaonganhang.vn/dong-usd-tao-day-3-nam-khi-niem-tin-vao-su-doc-lap-cua-fed-lung-lay-163087.html