Worries about “Powell being hyped up” exacerbate the US dollar index falling below the 99 mark for the first time in three years

The Zhitong Finance App learned that as US President Trump continued to criticize and suggest considering firing Federal Reserve Chairman Powell, the trading momentum of selling dollars increased on Monday. The dollar weakened against almost all major currencies as investors weighed the risk of Powell's dismissal and how this could further weaken confidence in US assets. The US dollar index fell in the short term and is now at 98.66, falling below 99 points for the first time in three years.

The euro and the Swiss franc are among the currencies that have risen the most. The former rose to their highest level in three years. US stock futures declined slightly, while 10-year US Treasury yields rose, underscoring continued tension over the world's largest economy. Amid the global trade war, the outlook for the US economy is bleak.

Powell's possible dismissal could weaken investors' confidence, as the independence of the Federal Reserve is seen as a key reason to invest in US assets. However, Trump is likely to welcome the dollar's weakness to a certain extent, as he previously said he would welcome cheaper currencies as it would make American products more competitive.

Win Thin, head of global market strategy at Brown Brothers Harriman & Co., wrote in a report: “We believe the dollar will continue to be weak. Attacks on the independence of the Federal Reserve are intensifying. Admitting that this research is ongoing should be taken very seriously and very negatively.”