Palladium prices fell on Monday on profit-taking after marking huge profits in recent days.
The dollar index hit early 2022 lows amid increasing concerns about the Federal Reserve’s independence, hurting confidence in the US monetary system.
A weaker dollar makes the greenback-denominated metals futures cheaper to holders of other currencies.
Investors interpreted Fed Chair Jerome Powell’s last week Congressional testimony as leaning cautious, after saying that rate cuts are likely if inflation doesn’t rise this summer in response to tariffs.
According to the Fedwatch tool, the odds of a Fed 0.25% interest rate cut in July stood at 20%.
The odds of such a cut in September stood at a much better 93%.
Currently, markets await a spate of important US data this week, including the crucial payrolls report on Friday, which would impact market’s expectations for upcoming Fed moves.
The dollar was pressured once more by renewed attacks by President Donald Trump against Powell, urging him to resign before the end of his term in May.
Trump also said he wants main interest rates down to 1% from the current 4.25-4.5%, adding he plans to replace Powell with someone much more interested in monetary easing.
Investors are also analyzing Trump’s new massive tax cut and spending bill, currently in the Senate, which is estimated to add $3.3 trillion to government debt in 10 years.
The dollar index fell 0.2% as of 15:57 GMT to 97.1, with a session-high at 97.3, and a low at 96.9.
Palladium futures fell 2.9% as of 15:58 GMT to $1118 an ounce.
