The dollar weakened on Thursday as investors grew concerned over the Federal Reserve’s independence following fresh criticism from U.S. President Donald Trump, ahead of comments due later this week from Fed Chair Jerome Powell that could shape interest rate expectations.
اضافة اعلان
Trump called on Fed Governor Lisa Cook to resign after a political ally raised questions over two mortgages she holds in Michigan and Georgia, intensifying his efforts to gain leverage over the central bank.
Cook responded that she “will not accept intimidation to force her to step down” from her role. The Wall Street Journal reported Wednesday that Trump had told aides he was considering trying to remove her.
Prashant Newnaha, senior Asia-Pacific rates strategist at TD Securities, said: “This could raise questions about the Fed’s supervisory and regulatory functions, but it has little immediate impact on monetary policy.”
The reaction in currency markets was relatively muted. The dollar initially dipped but remained largely steady in Asian trading. The Japanese yen held on to recent gains and was little changed at 147.41 per dollar. The euro traded at $1.1642, while sterling was last at $1.34535.
The dollar index, which tracks the U.S. currency against six major peers, stood at 98.301.
Attention now turns to whether Powell will challenge market expectations for a rate cut next month when he delivers a speech Friday at the Jackson Hole symposium, following weak July jobs data.
According to CME’s FedWatch tool, traders are pricing in an 82% chance of a 25-basis-point rate cut next month.
Elsewhere, the New Zealand dollar fell sharply overnight to $0.58205, its lowest since April, after sliding 1.2%. The Reserve Bank of New Zealand cut rates on Wednesday as expected and left the door open for further easing if needed.
The Australian dollar slipped 0.13% to $0.64245, hovering near a two-week low.
