The U.S. dollar sank to a near four-year low against a basket of currencies on Tuesday, as traders kept watch for possible coordinated currency intervention by U.S. and Japanese authorities and this week’s Federal Reserve interest rate decision.

The dollar has been under intense pressure this month from factors including U.S. President Donald Trump’s policymaking and concerns about Federal Reserve independence.

In addition, disagreement between Republicans and Democrats over funding for the Department of Homeland Security after the fatal shooting of a second U.S. citizen by federal immigration officers in Minnesota has raised concerns of another U.S. government shutdown.

Trump accused South Korea’s legislature of “not living up” to its trade deal with Washington, and said late on Monday he would increase tariffs on imports from Asia’s fourth-biggest economy into the U.S. such as autos, lumber and pharma to 25%.

Trump has also in recent days said he would impose a 100% tariff on Canada if it follows through on a trade deal with China.

‘Tariff Man’ Shows No Sign of Regrets

The Korean won strengthened 0.5% against the dollar to 1,438.05 per dollar.

“With the ‘tariff man’ showing no sign of repentance and the U.S. government headed into another shutdown, economic policy uncertainty is soaring once again, leading to an intensification in the ‘Sell America’ trade that has dominated markets for the better part of a year,” said Karl Schamotta, chief market strategist with payments company Corpay in Toronto.

“Positive fundamentals should eventually reassert themselves, but for now, no one is willing to catch the falling chainsaw that is the U.S. dollar,” he said.

Against a basket of currencies, the dollar fell 0.9% to 96.212, its lowest since February 2022.

Investors will watch the Fed’s two-day meeting this week for clues to the path of monetary policy.

“The big risk, as we see it, is not in the rate decision. We’re pretty confident that the Fed is going to hold rates unchanged. But Trump is not going to like that,” said Nick Rees, head of macro research at Monex.

The president has been urging the Federal Reserve to cut rates.

Trump could announce his candidate for Chair Jerome Powell’s successor soon after the rate decision, especially if the president does not support the central bank’s decision, Rees said.

Yen Intervention Watch

Much of the foreign exchange market’s focus has been on the yen, which rallied by as much as 3% over the last two sessions on talk of the U.S. and Japan conducting rate checks – often seen as a precursor to official intervention.

That helped the yen slip below 153 to the dollar. It was last trading at 152.76.

“While there are several potential culprits for the dollar’s drop, the main driver is the fallout from reports that the US Treasury is considering direct currency intervention,” Jonas Goltermann, deputy chief markets economist at Capital Economics, said in a note.

While there has been no confirmation of rate checks from officials in Japan or the U.S., a person familiar with the matter told Reuters that the New York Federal Reserve had checked dollar/yen rates with dealers on Friday.

Japanese authorities said on Monday they have been in close coordination with the U.S. on foreign exchange.

The euro was last 0.96% higher at $1.19805, trading around levels last seen in June 2021, and just shy of the $1.20 mark. Similarly, sterling added 0.7% to $1.3776, its strongest since October 2021.

The Australian dollar rallied 0.9% to $0.6979, its highest since February 2023.

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(Reporting by Saqib Iqbal Ahmed in New York, Sophie Kiderlin in London and Rae Wee in Singapore, additional reporting by Amanda Cooper in London; Editing by Timothy Heritage, Aidan Lewis and Barbara Lewis)