U.S. Dollar Index hits lowest level since Feb 2022 after Trump slams Powell over rates
Dollar Index slides to 97.5 as Trump pressures Fed for immediate rate cuts.
The U.S. Dollar Index (DXY) has extended its decline this week, weighed down by both political headwinds.
After opening near 98.76 on Monday, the index dropped as much as 1.25% to test a key support level at 97.5, a price zone last seen in February 2022. The 97.5 level temporarily cushioned the drop, but momentum has remained weak.
This week’s selloff comes in the context of renewed political pressure from U.S. President Donald Trump, who sharply criticized Federal Reserve Chair Jerome Powell for not cutting rates. Trump labelled Powell as “Mr. Too Late” and warned of an economic slowdown unless monetary policy is eased “immediately,”. This remark by the U.S. president rekindled market doubts about the Fed’s independence and have put further pressure on the dollar, amplifying existing bearish sentiment from recent price action.
DXY stuck below 98.7 resistance as daily RSI remains deeply oversold
Technically, the DXY attempted a modest bounce after hitting 97.63 in the early European session on Tuesday, climbing back toward the 98.0 handle. But so far, it has failed to generate any meaningful follow-through. The 4-hour RSI has just exited oversold territory but remains below 50, still in bearish territory, while the daily RSI stays deep in the oversold zone. This mixed momentum suggests traders are hesitant to commit either way, though the broader setup still points south.
DXY price dynamics (April 2025). Source: TradingView
Importantly, 98.7, a former support level, will now act as a key resistance. Unless the index can reclaim and hold above that mark, the path of least resistance continues to tilt lower. A decisive move below 97.5 could open the door to further weakness toward the 97.0 psychological handle.
The bearish trend is being reinforced, not just by price action and momentum indicators, but by the fundamental narrative. Market expectations for rate cuts, especially when amplified by political figures tend to erode yield support for the dollar. If the Fed gives in to that pressure, or if economic data begins to weaken, DXY may have further room to fall. Until there’s a structural shift in policy direction or a break above 98.7, dollar bulls may stay on the sidelines while the bears keep control.
The Dollar Index broke below key support and sank to 97.75, showing strong technical exhaustion. Tariff concerns drove its steepest monthly loss since 2009, wiping out early 2025 gains.
