The US Dollar Index (DXY) traded in the red on Monday (4/21), sliding towards the 98.50 region and marking a fresh three-year low. The sharp decline followed growing market concerns over the institutional integrity of the Federal Reserve (Fed) after US President Donald Trump again publicly criticized Fed Chairman Jerome Powell and confirmed that he was looking for ways to remove him. Trump accused Powell of manipulating interest rates for political purposes in 2024 and described him as "late" in reacting to economic conditions.

Amid rising global uncertainties and deteriorating confidence in US monetary leadership, Gold surged to a fresh all-time high near $3,425 an ounce, benefiting from safe-haven demand and a slumping Greenback. The broader sentiment remained risk-averse with traders reassessing the Dollar's ​​long-term reserve status amid unpredictable trade and fiscal policies.

Daily Market Movers Summary: Fed Threats Shake Markets

Gold's explosive rise above $3,400 underscores the rush to safe havens as fears of political interference mount in the US.

President Trump's repeated attacks on Fed Chair Powell — along with reports that his administration is exploring legal avenues to remove him — have shaken investor confidence.

The DXY's slide to the 98.00 zone reflects market unease with a potentially politicized central bank. Comments from White House adviser Kevin Hassett and Trump's Truth Social posts have only deepened perceptions of hostility toward monetary independence.

Analysts at Scotiabank warn that undermining the Fed could undermine its credibility in fighting inflation, which could raise inflation expectations and weigh on the USD further. (Newsmaker23)

Source: FXstreet