Dollar Slips to Three-Year Low as Trump Eyes Early Fed Appointment

The US dollar slumped to a three-year low after reports emerged that Donald Trump will likely accelerate the announcement of his pick to replace Federal Reserve Chair Jerome Powell. 

Trump, who has clashed with Powell over interest rate policy, is reportedly considering unveiling his successor as early as September, far ahead of the usual timeline. 

Powell’s term runs for another 11 months, but frustration from the White House over the Fed’s reluctance to lower rates has fuelled speculation of an early move.

The dollar dropped 0.5% against a basket of major currencies, marking its weakest level since March 2022. Markets are on edge, concerned that an early nomination could shake confidence in the Fed’s independence and increase political pressure on monetary policy. 

Trump has been vocal in demanding rate cuts to counter the economic fallout from his tariff policies, which have already pushed inflation projections higher.

What Does This Mean for Me?

Any potential successor will surely be more in step with Trump’s policies, but will also raise questions about the Fed’s ability to act independently in the final stretch of Powell’s leadership. 

The Fed kept rates unchanged in June, citing uncertainty around tariffs, inflation risks, and political intervention as key factors. With the dollar under pressure and traders watching for the next policy shift, the Fed’s credibility hangs in the balance as Trump looks to reshape the central bank’s leadership.