Dollar Steadies After Trump Cools Powell Attacks, Markets Eye Trade Progress

The U.S. dollar rallied early Wednesday before steadying as President Donald Trump backed off threats to fire Federal Reserve Chair Jerome Powell, easing investor jitters over central bank independence.

“I have no intention of firing him,” Trump told reporters Tuesday, softening recent pressure on Powell to slash rates. The move calmed fears of political interference, lifting the greenback in Asian trade.

The dollar surged over 1% against the yen to 143.21 before settling at 141.85. It gained 0.4% versus the Swiss franc to 0.8222, while the euro dipped 0.2% to $1.1393 and sterling fell 0.15% to $1.3313.

“The market is welcoming signs the White House won't risk asset prices for political brinkmanship,” said Prashant Newnaha, senior strategist at TD Securities. “For now, Trump is playing the market card for leverage.”

Adding to bullish sentiment, U.S. Treasury Secretary Scott Bessent hinted at a potential easing in trade tensions with China. Trump also said a deal could “substantially” reduce tariffs, though not eliminate them entirely.

“Trade is the bigger lever,” said City Index’s Matt Simpson. “If tensions ease, it could be the trigger dollar bulls have been waiting for.”

Eighteen nations have submitted tariff proposals after Trump’s recent tax hikes. The administration is set to meet with 34 countries this week for negotiations, the White House confirmed.

Elsewhere, the Australian dollar rose 0.49% to $0.6396 and the New Zealand dollar gained 0.28% to $0.598.

In crypto, Bitcoin surged 2% to $93,395—its first break above $90,000 since March—while Ether jumped 6% to $1,796.