Predictions that an emerging Fed crisis will cause the U.S. dollar to "fall” are fueling bullish bitcoin price

The dollar held to its losses on Tuesday after the Trump administration opened a criminal investigation into Federal Reserve Chair Jerome Powell, a move that threatens the central bank's independence and faith in U.

The ICE U.S. Dollar Index, a measure of the greenback against a basket of six major peers, was weakening by 0.3% on Monday in reaction to the Department of Justice's probe into Federal Reserve Chair Jerome Powell.

The dollar fell over 9% in 2025, its worst annual performance since 2017. The declines reflect a volatile year for the U.S. economy, with investors likely facing another unpredictable 12 months.

The U.S. dollar slumped more than 9% this year, against a basket of currencies, its worst showing in eight years.

The Canadian dollar clawed back some recent ‌declines against its U.S. counterpart on Monday as increased concerns about the independence of the Federal Reserve weighed on the greenback.

The Bloomberg Dollar Spot Index has fallen 8.1% this year so far. After tumbling in the wake of Donald Trump’s “Liberation Day” tariffs in April, the greenback came under sustained pressure as the president kicked off his aggressive campaign to get a dovish appointee installed as Fed chair next year.

Heading into 2026, the US dollar (DXY) faces a complicated path driven by a conflict between the Fed and the government. Experts predict a "V-shaped" year for the currency. Read more