Commerzbank: Threats to the Federal Reserve's independence and rising US debt pose structural headwinds for the US dollar

Commerzbank analyst Antje Praefcke said that threats to the Federal Reserve's independence and the worsening US budget deficit are structural pressures on the US dollar. US President Trump's dismissal of Federal Reserve Governor Lisa Cook has sparked new concerns about the Fed's independence, which she said is "critical to maintaining the value of the currency."

Praefcke said the central bank must make painful decisions to address economic imbalances. Furthermore, the dollar is facing pressure from concerns about the sustainability of U.S. debt. Trump's tax and spending bills could end up being more expensive than currently planned. She said that while some tax breaks should be temporary, past experience shows they are difficult to reverse when they are nearing expiration.