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Illustration: Lazaro Gamio/Axios

Fed Chair Jerome Powell has done his part to deflate the very strong U.S. dollar.

The state of play: Powell announced in December that he could feel the market and at last month's policy meeting announced his plans for the central bank to stop with the 50 B's by year-end. Still, the dollar has continued to rise.

What's happening: Analysts and fund managers had largely expected the dollar to weaken this year as other central banks initiated quantitative tightening and stimulus from the 2017 U.S. tax cuts and spending increases lost their impact.

What they're saying: But other central banks have followed Powell's lead in reversing the QT trend, and political dysfunction and economic malaise are keeping the greenback bid, John Doyle, vice president of dealing and trading at Tempus Inc., tells Axios.

  • "While the Fed has also taken a dovish shift, U.S. rates are still higher than most of our counterparts, which should lend some support most of the year."

Despite having complained as recently as March 2 that the dollar is too strong, President Trump may also be to blame for the continued strength, says Douglas Borthwick, managing partner at Makro Intelligence.

Treasury Secretary Steven Mnuchin said on Saturday that the U.S. will insist measures to prevent currency devaluations be included in future trade deals.

There's also a general flight to safety that pushes traders to buy dollars in times of economic stress. But it may be playing out in new and unexpected ways.

The intrigue: The New York Times' Binyamin Applebaum writes that foreign demand for $100 bills has surged even as the domestic use of dollars has declined.

"The number of $100 bills in circulation roughly doubled between 2008 and 2017, and experts estimate a vast majority are in foreign hands."

Between the lines, per NYT: One possible reason is that the $100 bill "is the preferred currency for illegal transactions: gambling, drug deals, sales of weapons."

  • Further, "available evidence suggests large numbers of $100 bills are stuffed in mattresses or other hiding places — particularly in nations where people lack confidence in the value of the domestic currency, or the integrity of the financial system, or the safety of private property."

Go deeper

New Zealand prime minister announces vaccine mandate for businesses

New Zealand Prime Minister Jacinda Ardern during an October COVID-19 briefing in Wellington, New Zealand. Photo: Robert Kitchin - Pool/Getty Images

New Zealand Prime Minister Jacinda Ardern announced Tuesday a new COVID-19 vaccine mandate for businesses as the government pushes to reach a 90% vaccination target for the country.

Why it matters: Under the new COVID-19 Protection Framework, businesses in close contact with customers must require a vaccine certificate from them. Ardern said at a briefing Tuesday that in order for these venues, which include hair salons, bars, restaurants and gyms, along with events, to operate staff must also be vaccinated.

State Department to set up new cyber bureau to combat hack attacks

Secretary of State Tony Blinken speaks on the challenges during an October conference in Quito, Ecuador. Photo:y Felipe Stanley/Agencia Press South/Getty Images

Secretary of State Tony Blinken announced Monday plans for the State Department to create a new bureau of cyberspace and digital policy.

Why it matters: The establishment of the bureau and plans for a new envoy to oversee critical and emerging technology come after a series significant hack attacks and other online crimes, notably ransomware assaults on U.S. infrastructure.

Biden rejects Trump's latest executive privilege claims

Photo: Jim Watson and Saul Loeb/AFP via Getty Images

The White House on Monday rejected two more of former President Trump's claims of executive privilege over documents that the House select committee investigating the Jan. 6 Capitol riot requested, CNN first reported.

Why it matters: Trump's legal team is seeking to block some of the panel's requests for records by invoking executive privilege, which can allow presidents and their aides to sidestep congressional scrutiny. The Biden administration has maintained that it will evaluate on a case-by-case basis.