Markets are starting the week with a clear risk-off tone for the U.S. dollar, as political noise and shifting rate expectations drive price action across major FX pairs.

Market Snapshot

• USD/CAD: Down 0.43%
• GBP/USD: Up 0.82%
• EUR/USD: Up 1.3%

The U.S. dollar is broadly weaker this morning, losing ground to all its G10 peers, with the euro-dollar now trading at its lowest USD level since December 2023.

Key Driver: Powell Under Pressure?

Reports that the Trump administration is considering terminating Jerome Powell as Fed Chair have sent waves through the market, raising concerns about the Fed’s independence and fueling expectations that a more dovish leadership could emerge.

This speculation is weighing heavily on the dollar, as markets interpret the move as a sign of pressure to lower interest rates—potentially sooner than previously expected.

Market Rotation & Safe Haven Flows

In addition to the Powell story, there’s evidence of a broader rotation away from U.S. dollar-denominated assets:

• Outflows from U.S. Treasuries are being reported by several global banks.
• These funds are rotating into alternative safe havens—notably the yen, Swiss franc, euro, and gold.

Calendar & Data This Week

The macro calendar is relatively light, with housing data and durable goods orders due later in the week. Until then, market sentiment is likely to remain sensitive to headlines, particularly any confirmation or denial from the White House regarding Powell’s status.

With political tension rising and investors repositioning around rate expectations and safe-haven alternatives, the U.S. dollar opens the week on shaky footing. Unless clarity emerges from the administration or the Fed, market volatility is likely to remain elevated, and dollar weakness could persist.