Dollar Plunges, Bitcoin Soars
The US Dollar Index (DXY) plummeted to a three-year low, falling below 98.2, its lowest point since March 2022. This significant drop follows reports that President Trump is considering removing Federal Reserve Chairman Jerome Powell.
Trump's Pressure on Powell Weakens the Dollar
Economist Peter Schiff noted the dollar's decline on X (formerly Twitter), highlighting its impact on other currencies and precious metals. The weakening dollar is partly attributed to comments by National Economic Council Director Kevin Hassett, who stated that Trump's team is exploring the possibility of ousting Powell. Hassett criticized the Fed's actions under Powell's leadership, suggesting political motivations behind interest rate decisions.
President Trump has openly criticized Powell for being slow to cut interest rates, contrasting his actions with those of the European Central Bank. While Powell's removal is debated, it raises concerns about the Federal Reserve's independence. The Fed's current stance against rate cuts, amid rising inflation, also plays a role in the dollar's weakness.
Bitcoin's Rise Amid Dollar Weakness
The falling dollar has coincided with a significant increase in Bitcoin's price. Bitcoin surged past $87,000, its highest level since April 2nd. This surge aligns with the general trend where dollar weakness benefits cryptocurrencies, often seen as inflation hedges.
Sean McNulty, Derivatives Trading Lead at FalconX, attributed the crypto rally to the USD's weakness. As of writing, BTC traded at approximately $87,586, representing a daily appreciation of 3.5%. This increase underscores the close relationship between the dollar's value and Bitcoin's performance.
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