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Trump’s Fed Comments Continue to Weigh on Dollar

2018-8-22 10:11:41Trading Strategies
Trump’s Fed Comments Continue to Weigh on Dollar

The U.S. fell against other currencies on Tuesday, as comments from U.S. President Donald Trump on the Fed increasing interest rates weighed on the greenback.

The U.S. dollar index, which measures the greenback’s strength against a basket of six major currencies, decreased 0.20% to 95.49 as of 11:20 AM ET (15:20 GMT).

Trump said in an interview with Reuters on Monday that he was "not thrilled" with Fed Chairman Jerome Powell for raising rates and added that the Fed should do more to help him to boost the economy.

Trump nominated Powell to succeed former Fed Chair Janet Yellen earlier this year. The comments come ahead of Wednesday’s minutes of the Fed’s August meeting, with investors on the lookout for any tweaks to the Fed’s outlook on inflation, the economy and trade war fears.

The dollar was higher against the safe-haven yen, with USD/JPY increasing 0.35% to 110.44. In times of uncertainty, investors tend to invest in the Japanese yen, which is considered a safe asset during periods of risk aversion.

The euro was higher, with EUR/USD rising 0.31% to 1.1517. Sterling also gained ground with GBP/USD up 0.45% to 1.2851.

USD/TRY fell 0.41% to 6.0335 in thin trading, as Turkish financial markets are closed for holidays for the week. The lira was under renewed pressure after Trump said there will be "no concessions" in a disagreement with Turkey over a detained U.S. pastor.

Meanwhile the Australian dollar was up, with AUD/USD rising 0.08% to 0.7344 while NZD/USD was up 0.66% to 0.6671. The loonie was slightly lower against the greenback, with USD/CAD inching forward 0.05% to 1.3052.