US Dollar's Decline Sparks Global Economic Uncertainty Amid Trump's Criticism of Powell

Published on 4.26.25

  The recent fluctuations in global currency markets have significant implications for international relations, particularly between countries with major currencies such as the euro, yen, and Swiss franc. The US dollar's decline against these currencies is largely attributed to uncertainty over trade policies and tariffs imposed by President Trump. US President Donald Trump's criticism of Federal Reserve Chair Jerome Powell has raised concerns about the independence of the US central bank in setting monetary policy. Analysts believe that while Trump cannot directly remove Powell through formal procedures, he can create a perception of change by publicly criticizing him, which could undermine the Fed's perceived independence. Dr Mohd Afzanizam Abdul Rashid, chief economist at Bank Muamalat Malaysia Bhd, notes that this development has significant implications for global trade and investment flows. The euro, which reached a three-year high, is seen as a safe-haven asset in times of uncertainty. This trend is also reflected in other major currencies such as the yen and Swiss franc, which have strengthened against the US dollar. The implications of these currency fluctuations are far-reaching, with potential impacts on global trade, investment flows, and economic stability. The situation highlights the interconnectedness of global economies and the need for clear communication and coordination between central banks and governments to maintain economic stability.

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