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U.S. Dollar Index Drops 1.8% to 3-Year Low as Trump Targets Powell

Coin WorldMonday, Apr 21, 2025 6:03 am ET
2min read

The U.S. Dollar Index (DXY) has experienced a significant decline, reaching a three-year low. This drop has been influenced by President Trump's attempts to remove Federal Reserve Chair Jerome Powell, which has led to a notable market response. The DXY has fallen below 99, settling at 98.2, marking the lowest value since March 2022. This decline has coincided with a surge in Bitcoin's price, which recently surpassed $87,000 as investors seek refuge in cryptocurrencies amidst dollar weakness and fears of inflation.

Economist Peter Schiff has highlighted the gravity of the current economic landscape, noting that gold has hit a record high of $3,380, the euro is above $1.15, and the dollar has fallen below 141 Japanese yen and .81 Swiss francs. The dollar Index is below 98.5, a new three-year low. This illustrates the complex dynamics at play in the global economy, with the dollar's weakness driving investors towards alternative assets like Bitcoin.

On April 18, National Economic Council Director Kevin Hassett revealed that Trump is actively considering Powell’s removal. This response came following a question from a reporter about the potential for Powell’s ouster, indicating substantial political tension surrounding U.S. monetary policy. Hassett stated that the president and his team will continue to study that matter, pointing to the contentious relationship between the Trump administration and the Federal Reserve. Trump has openly criticized Powell, calling for faster rate cuts, contrasting Powell’s actions with those of the European Central Bank (ECB), which plans additional cuts. In a statement, Trump proclaimed, “Powell’s termination cannot come fast enough!” underscoring his frustration with Powell’s management.

The potential removal of Powell may indeed pave the way for lower interest rates, which could catalyze a rally in the cryptocurrency market. Historical trends suggest that lower interest rates often lead to a weaker dollar, causing investors to flock to Bitcoin as a more stable store of value amidst inflationary pressures. The correlation between the DXY’s drop and Bitcoin’s recent surge to over $87,000 is striking, suggesting that as confidence in the dollar wanes, interest in cryptocurrencies rises. This shift in investor sentiment further validates Bitcoin’s role as a hedge against the dollar’s declining purchasing power.

“USD weakness is driving the rally in crypto,” affirmed Sean McNulty, Derivatives Trading Lead at FalconX, revealing the direct impact of currency valuations on cryptocurrency trading. As of the latest reports, Bitcoin was trading at approximately $87,586, marking a 3.5% increase within a day. With such impressive gains amidst market volatility, all eyes remain on Trump’s ongoing strategies and the overarching implications for both national and global economies.

This recent dip in the U.S. Dollar Index aligns with significant shifts in investor behavior, particularly a growing interest in Bitcoin as a protective measure against economic uncertainty. As the situation unfolds, monitoring the developments regarding interest rates and Federal Reserve leadership will be crucial for understanding future trends in both traditional and digital asset markets.

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Frozen_turtle__
04/21
Trump vs. Powell is like a crypto soap opera. Drama fuels our gains, amirite?
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jstanfill93
04/21
Trump vs. Powell: drama fuels crypto gains
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kenton143
04/21
Powell's got the Fed huddle. Trump's calling shots. Next move: lower rates? 🤔
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Eli9105
04/21
Gold shining, dollar dipping, what's next for $BTC?
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Head_Product412
04/21
Bitcoin mooning while dollar tanks, classic flight to safety. Who needs gold when you have BTC?
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DrSilentNut
04/21
@Head_Product412 BTC's defying gravity, no cap.
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sssauber
04/21
@Head_Product412 What's your take on altcoins now?
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Current_Attention_92
04/21
DXY dipping, BTC pumping. My portfolio's doing the cha-cha. Who's with me on this wild ride?
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PlentyBet1369
04/21
@Current_Attention_92 What’s your BTC strategy? Long-term hold or swing trading? Curious how you’re navigating this market volatility.
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rbrar33
04/21
Gold at record highs. Safe-haven assets shining while dollars fade. What's your precious metal play?
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ReindeerApart5536
04/21
Trump vs. Powell is like a crypto soap opera. Rate cuts might be coming. Are we ready for moon missions?
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DJJamesBenjamin
04/21
@ReindeerApart5536 Next up: Bitcoin meets the Federal Reserve boardroom. HODL or fold? 🚀📉
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Howell--Jolly
04/21
"Looks like Trump’s trying to play Fed Chair like it’s a game of Monopoly, but instead of passing Go, we’re watching the dollar go broke. Bitcoin’s up, gold’s up, and the only thing down is Trump’s approval rating. Classic move, Big T. Meanwhile, Peter Schiff’s probably out there doing his victory dance, because this is exactly what he’s been warning about for years. The dollar’s weak, inflation’s strong, and Bitcoin’s the new black. RIP, fiat, you had a good run.
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Phuffu
04/21
@Howell--Jolly Trump's Fed shuffle looks like a meme stock play. Powell out, Bitcoin up, and the dollar down. Next move: YOLO fiscal policy? 🤔
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nicpro85
04/21
Dollar drop, Bitcoin pop 🚀 classic flight to safety
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WellWe11Well
04/21
@nicpro85 True, BTC usually benefits when the dollar dips.
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Sgsfsf
04/21
Dollar index at 3-year low. Time to hedge with some $BTC? 🤑
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SeriousTsuki
04/21
Kevin Hassett's comments got everyone on edge. Powell's future cloudy. Impact on markets is real.
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yeahyoubored
04/21
Trump's after Powell. ECB's playing different tunes. Who wins this monetary policy game?
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-Joseeey-
04/21
Interest rates dropping might pump crypto. Lower rates = weaker dollar. What's your strategy?
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racoontosser
04/21
Interest rates down, crypto up: historical playbook
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