Trump Fed Attacks Sink Dollar to Decade Low vs Swissy

The US dollar fell to a 10-year low against the Swiss franc amid investor fears over President Trump’s criticism of Fed Chair Powell and threats to central bank independence. The S&P 500 dropped 2.4% on Monday, Treasury yields climbed to 4.41% with markets pricing in just a 10% chance of a May rate cut despite political pressure.

Equities

The FTSE 100 posted its strongest weekly gain since October 2022 ahead of the Easter break, supported by a rally in housebuilders and strength in the energy sector. While the index was flat on the day, the broader tone was upbeat, with traders positioning for a potential Bank of England rate cut in May following softer-than-expected UK inflation data.

Rentokil climbed 5% after reporting a 2% rise in organic revenue for the first quarter. Sainsbury’s added 3.6% after the supermarket chain forecast flat profits for the year and reiterated its intention to remain price competitive. Deliveroo rose 3.3% after it reported a 7% increase in orders for the first quarter, beating the previous quarter’s growth.

The automobiles and parts index dropped 5.3%, dragging the benchmark lower, while defence firms Rolls-Royce and BAE Systems slipped 1.4% and 1.5%, respectively. Man Group fell 2% after disclosing a $5.6 billion decline in assets under management over two weeks in April.

In the US, major indices closed sharply lower following another round of aggressive comments from President Trump targeting Federal Reserve Chair Jerome Powell. The S&P 500 fell 2.4% to 5,158.20, now 16% below its February peak.

The Dow dropped 2.5%, or nearly 1,000 points, while the Nasdaq slid 2.6%, weighed down by losses in large tech stocks. Tesla fell 5.8% after Reuters reported a delay in launching its budget Model Y. Nvidia dropped 4.5% after reports surfaced that Huawei would begin shipping an advanced AI chip to Chinese customers as early as next month. FIS bucked the trend, rising 2.4% following a brokerage upgrade.

Despite market weakness, earnings season continued with 68% of companies beating expectations so far, though analysts have trimmed their full-quarter earnings growth forecast for the S&P 500 to 8.1%, down from 12.2% at the start of the period. Notable results expected later this week include Alphabet, Tesla, Boeing, Northrop Grumman, Lockheed Martin, and 3M.

Forex & Commodities

The US dollar fell sharply on Monday, hitting a three-year low against a basket of currencies after President Trump renewed attacks on Federal Reserve Chair Jerome Powell. The dollar dropped more than 1.5% against the Swiss franc, reaching a decade low of 0.8063. It also weakened against the euro, which rose above $1.15 to its highest since November 2021. Sterling gained ground, touching $1.34 for the first time since September, while the yen strengthened to 140.66, its best level in seven months. The Australian and New Zealand dollars also advanced, with the latter reclaiming the $0.6000 level.

Gold jumped 2.2% to trade at $3,493.41 an ounce, briefly touching a record high of $3,500.05 as concerns about Fed independence and broader economic uncertainty continued to drive demand for safe-haven assets. US gold futures rose 2.3% to $3,502.40. Silver edged up 0.3% to $32.80 an ounce, platinum gained 1.1% to $972.20, and palladium climbed 2.2% to $948.14. Analysts noted that while gold’s relative strength index is above 70, suggesting it may be overbought in the short term, uncertainty over US monetary policy could support demand.

Oil prices moved lower, with Brent crude falling 2.5% to $66.26 a barrel and US WTI crude dropping 2.5% to $63.08. The declines followed signs of progress in US-Iran nuclear talks, which could lead to increased Iranian oil exports.