Dollar surges then steadies as Trump backs down on Fed attacks

Bessent's optimism over US-China trade negotiations aids sentiment

20250423 dollar note

Markets this week have been roiled by doubts over the Fed's independence after repeated attacks by U.S. President Donald Trump on Federal Reserve Chair Jerome Powell. © Reuters

SINGAPORE (Reuters) -- The U.S. dollar rose sharply and then steadied on Wednesday as President Donald Trump backed away from threats of firing Federal Reserve Chair Jerome Powell in a relief to investors while optimism around trade deals lifted beaten down sentiment.

The markets this week have been grappling with the notion that the Fed's independence could be under threat after repeated attacks by Trump on Powell for not cutting rates since the president resumed office in January.

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