New Reasons to Sell the Dollar: A Battle Between the White House and the Federal Reserve

Markets are worried that Trump may dismiss Federal Reserve Chairman Powell, a move that would undermine the Fed's independence and further shake confidence in dollar assets. The 'Sell America' trend accelerated on Monday. The dollar index plummeted 1% that day, briefly falling below the 98 mark; both the dollar and U.S. stock futures dropped, while the yield on U.S. 10-year Treasury bonds rose significantly.

The euro rose to a three-year high, and the yen also reached a new high since September of last year. Several strategists expect the dollar's weak trend to continue.

After White House National Economic Council Director Hassett publicly stated that 'Trump is looking into this matter,' several hedge funds joined the ranks of dollar sellers. Data from the U.S. Commodity Futures Trading Commission (CFTC) shows that hedge funds' current bearish stance on the dollar is at its highest level since October of last year.

Whether Powell will be dismissed has become a focal point for the market. According to the Federal Reserve Act, Federal Reserve governors can only be removed by the President for 'cause,' and no conclusive judicial interpretation has yet been established, but the event itself is already sufficient to become a new trigger for investors to reduce their dollar exposure.