The US dollar continued to slide on Monday, falling to its lowest level since 2022, as global investors shifted away from US assets amid tensions between President Donald Trump and the Federal Reserve.
The US Dollar Index, which measures the greenback’s performance against a basket of foreign currencies, fell as low as 97.92 on Monday. That was the index’s lowest level since March 2022, according to FactSet data.
The ICE US Dollar Index hit its lowest level since 2022 on Monday and was last down 1.25% to 97.89.
The dollar has been in sharp decline since President Donald Trump took office in January. The implementation of global retaliatory tariffs on April 2 is seen as triggering another wave of US dollar selling. Trump’s criticism of Federal Reserve Chairman Jerome Powell on Friday, as well as White House Economic Advisor Kevin Hassett’s statement that the president and his team are looking into the possibility of removing the central bank chief, appeared to add to the pressure on the dollar.
“We are seeing clear signals from the markets that they are not comfortable with the idea that the president might try to remove the Fed chairman. There has been a loss of confidence in US economic policy in recent weeks. We can see that in a rather worrying combination of pressure on long-term bond yields, while the US dollar has weakened. This suggests that global investors are moving capital out of the US,” Krishna Guha, vice chairman of Evercore ISI, said on Monday.
Andy Laperriere, head of US policy at Piper Sandler, echoed similar concerns in a note to clients on Monday.
“We are facing a president determined to shake up Washington’s political landscape. Investors who have previously ignored Trump’s rhetoric on higher tariffs have been caught off guard. It would be a mistake to continue to dismiss his words and actions on other issues,” Laperriere wrote.
The U.S. dollar is traditionally considered the global reserve currency, and U.S. assets have outperformed other markets over the past decade, boosting demand for the greenback. However, U.S. stock and bond markets have been in decline since the start of tariff tensions between the Trump administration and foreign leaders, which have also weighed on the greenback.
On Monday, several of the currencies that have gained the most against the dollar over the period showed further gains. The euro rose 1.3% against the greenback, while the Japanese yen and Swiss franc also posted gains.
