Posted on

Dollar falls after Trump remarks

TOKYO (Agencies): The dollar traded lower against a basket of major peers on Tuesday after U.S. President Donald Trump said he was “not thrilled” with Federal Reserve Chairman Jerome Powell for raising interest rates.

The dollar was also soft as investors pulled out of the safe-haven currency ahead of anticipated talks this week between China and the United States, which some market participants believe might lead to an easing in their escalating trade dispute.

The dollar index against a basket of six other currencies fell 0.37 percent to 95.554 as of 0345 GMT after touching as low as 95.440, its lowest level since Aug. 9.

The yen was basically flat at 110.08 yen as of 0345 GMT, paring gains after touching as high as 109.775 yen earlier. The dollar on Tuesday fell below the psychologically-significant 110-yen level for the first time since June 28.

The greenback slipped after Trump said in an interview on Monday that he was “not thrilled” with Powell’s raising of interest rates. Trump nominated Powell last year to replace former Fed Chair Janet Yellen.

The president spooked investors in July when he criticized the Fed over tightening monetary policy. On Monday, he said the Fed should be more accommodating on interest rates.

Trump also said the U.S. central bank should do more to help him to boost the economy, while he also accused China and Europe of manipulating their respective currencies.

Escalating trade tensions between the United States and its trading partners and a plunge in the Turkish lira had pushed the dollar index to 96.984 on Aug. 15, its highest since June 2017.

The dollar’s rally halted ahead of trade talks between Chinese and U.S. officials in Washington. The meetings, expected to take place mid-week, involve lower-level officials but are the first formal U.S.-China trade talks since June.

On Tuesday, the offshore Chinese yuan was nearly flat against the greenback, edging 0.07 percent higher to 6.8326 per dollar as of 0347 GMT.

The euro, which had slipped to a 13-month low early last week amid concerns that the Turkish crisis could hurt European bank, gained on Tuesday.

The single currency rose 0.36 percent to $1.15225 as of 0347 GMT, giving up some gains after trading at $1.1544 during early morning trade.

The Australian dollar was 0.13 percent higher at $0.7350, proving resilient to turmoil in politics at home where Prime Minster Malcolm Turnbull survived a leadership vote with a perilously narrow margin.

 

Advertisements

Leave a Reply