Dollar Dips Amid Concerns Over Fed Independence and Trade Policies

The U.S. dollar tumbled to a new low against the euro on Thursday amid rising concerns over the independence of the Federal Reserve. This decline comes in the wake of a report suggesting that President Donald Trump has considered replacing Fed Chair Jerome Powell, a move that investors find politically motivated and unsettling.

Kieran Williams, head of Asia FX at InTouch Capital Markets, remarked that uncertainties about the Fed's autonomy could reshape interest rate expectations and disturb the dollar's positioning in the market. In recent developments, currency values shifted as the euro gained strength, hitting $1.1687, and sterling rose to $1.3690.

Compounding market anxiety, Trump's turbulent tariff policies loom large as the trade deadline approaches on July 9. JPMorgan predicts that increased U.S. tariff rates could slow economic growth, elevate inflation, and heighten recession risks, thereby questioning the dollar's status as a global reserve currency.

(With inputs from agencies.)