USD/CNY falls to 7.01 as Trump-Fed clash triggers dollar selloff

USD/CNY dropped 0.4% to 7.0108 as the dollar plunged across the board following escalating tensions between President Trump and Federal Reserve Chair Powell. The yuan strengthened despite a former SAFE regulator warning that the currency's recent rally lacks fundamental support. Gold surged 2.1% to $2,850 while silver jumped 3.5% as investors fled to safe havens amid political uncertainty. The conflict centers on Trump's criticism of Fed policy, with Powell reportedly pushing back against political interference. Technical indicators show USD/CNY breaking below the key 7.05 support level, with next targets at 6.98 and 6.95. The dollar index fell 0.8% to 102.50, its sharpest daily decline in six weeks. Traders are now monitoring whether the PBOC will intervene to prevent excessive yuan strength, particularly given concerns about China's export competitiveness and the sustainability of the current rally without strong economic fundamentals.