The US Dollar Index (DXY) Has Dropped to a Three-Year Low Amid Reports That President Donald Trump Is Considering Removing Federal Reserve Chair Jerome Powell

The US Dollar Index (DXY) has dropped to a three-year low amid reports that President Donald Trump is considering removing Federal Reserve Chairman Jerome Powell.

The US Dollar Index (DXY) dropped to a three-year low amid reports that President Donald Trump is considering removing Federal Reserve Chairman Jerome Powell.

The development, which was likely to affect Bitcoin’s (BTC) price positively, saw the crypto rise to its highest level since President Trump’s Liberation Day.

Trump’s Push Against Powell Adds Pressure on the Dollar

According to the latest data, DXY had plunged below 99. At press time, it stood at 98.2, marking its lowest value since March 2022.

Economist Peter Schiff highlighted the severity of the situation in the latest post on X (formerly Twitter).

“Gold is up over $50, hitting a record high of $3,380. The euro is above $1.15. The dollar has also fallen below 141 Japanese yen and .81 Swiss francs (a new 14-year low, just 3% above a record low). The dollar Index is below 98.5, a new three-year low. This is getting serious,” Schiff posted.

The dollar’s steep fall arrived amid the latest comments made by National Economic Council Director Kevin Hassett on Friday, April 18.

Hassett disclosed that Trump and his team were actively examining the possibility of removing Powell.

His statement was in response to a reporter’s question about whether removing Powell was an option.

“The president and his team will continue to study that matter,” Hassett replied.

In addition, he pointed out the Federal Reserve’s political actions under Powell’s leadership. Specifically, Hassett criticized the Fed for raising interest rates shortly after Trump’s election and cutting them ahead of the election, moves he claimed favored the Democratic Party.

However, it’s worth noting that if Powell is removed and President Trump succeeds in persuading the Federal Reserve to cut interest rates, it could likely lead to a crypto market rally. Generally, when the Fed lowers interest rates, the US dollar tends to weaken.

As investors seek a hedge against inflation and the weakening of fiat currencies, they usually turn to cryptocurrencies, especially Bitcoin. The inverse relation between the DXY and BTC would also support the case for a rally if the dollar depreciates.

In fact, the latest decline in the dollar index had coincided with a notable increase in Bitcoin’s price. The largest cryptocurrency surged to over $87,000 for the first time since April 2.

“USD weakness is driving the rally in crypto,” Sean McNulty, Derivatives Trading Lead at FalconX, told Bloomberg.

At the time of writing, BTC was trading at $87,586. BeInCrypto data showed that this was a 3.5% increase over the past 24 hours.