US Dollar Falls after Trump Calls Fed Chair ‘Numbskull’
The US dollar fell against its major trading partners early Wednesday after President Donald Trump called Federal Reserve Chair Jerome Powell a numbskull. Traders are reacting against the global trade threats engineered by Trump’s administration with dollar selloffs.
Market data revealed that the US Dollar Index (DXY) is down around 1.10% so far this week as traders turn cautious and await more clarity on trade talks. The greenback has been having rough days in the markets since the beginning of the week, with investors exiting dollar positions amidst trade uncertainties.
Trump’s criticism of Powell has reignited concerns over the central bank’s independence, keeping market sentiment fragile. Powell remains under fire with President Trump’s renewed public attacks, calling him a “numbskull” and suggesting he will be gone in eight months. Despite Trump’s interference, the US Fed chair has maintained a no-rate-cut decision amidst pressure on the consumer price index.
A quick summary of foreign exchange activity heading into Wednesday revealed that USDEUR fell to 1.1733 from 1.1753 at the Tuesday US close but was above a level of 1.1703 at the same time Tuesday morning.
Eurozone consumer confidence data for July are due to be released. The next European Central Bank meeting is scheduled for Thursday, when no change in interest rates is expected.
GBPUSD rose to 1.3537 from 1.3532 at the Tuesday US close and 1.3483 at the same time Tuesday morning. There are no UK data on Wednesday’s schedule. The next Bank of England meeting is scheduled for Aug. 7.
USDJPY fell to 146.4039 from 146.5765 at the Tuesday US close and 147.5359 at the same time Tuesday morning. There were no Japanese data released overnight, but the US announced Wednesday morning it had reached a trade deal with Japan.
The next Bank of Japan meeting is scheduled for July 30-31. USDCAD fell to 1.3584 from 1.3604 at the Tuesday US close and 1.3682 at the same time Tuesday morning. Canadian new home price data for June, The next Bank of Canada meeting is scheduled for July 30.
Trump fueled cautious optimism after announcing what he called a “massive” trade deal with Japan, describing it as “perhaps the largest deal ever made.” The United States and Japan have reached a new trade agreement that reduces the previously proposed 25% tariffs on a wide range of Japanese goods to a lower 15% rate.
According to Trump, Japan will invest $550 billion in the United States, with 90% of the profits expected to return to American industries. He also claimed the agreement would create “hundreds of thousands of jobs” and open up Japanese markets to US exports, including cars, trucks, rice and agricultural products.
The absence of a deal with India and the European Union magnifies uncertainties surrounding the US dollar’s near-term. #US Dollar Falls after Trump Calls Fed Chair ‘Numbskull’ CBN Cuts Treasury Bills Rates Sharply, Rejects N1trn Subscription
