The US dollar increased the main currencies on Wednesday after President Donald Trump said he would not move to the fire to fire the president of the Federal Reserve, Jerome Powell, relieving market fears on political interference in monetary policy.
After a tense Easter weekend marked by repeated Trump attacks against Powell for not reducing interest rates, the president seemed to soften his tone. Speaking to journalists at the Oval office on Tuesday night, Trump said: “I have no intention of saying goodbye”, while preferring to prefer that the Fed is “a little more active” in the low rates.
The clarification sent the dollar very high in Asian trade. Greenback increased 0.75% compared to Y in 142.68 and won 0.7% against the Swiss Franc at 0.8249. The euro fell 0.49% to $ 1,1363.
Earlier this week, the dollar had been under pressure, quoting about minimums of several years against the euro and the Swiss Franc, and the Yen had reached a maximum of seven months as investors reacted to growing commercial tensions and political risks.
The feeling was driven by signs of potential decrease in commercial friction between the United States and China. Trump and the Secretary of the United States Treasury, Scott Besent, suggested that a new commercial agreement “substantially” reduce tariffs. Besent, speaking at a JP Morgan conference, indicated that both Washington and Beijing recognize the unsustainability of the current commercial state, while Trump hinted that a final agreement would reduce, but would not eliminate.
“The change of U of the Trump team must be a relief, which has helped support the US dollar in the bets that he (Powell) won to be replaced by some more deception,” said Matt Simpson, a senior market analyst of City Index.
However, Simpson added that the broader history remains the US-China trade, since future tariff developments will be critical for the economic perspective of the United States and the policy of interest rates.
Chris Weston, Chief of Research of Pepperstone, said: “The markets have been conditioned to the impulsive comments of the president and subsequent reversions. His position on Powell should help relieve false fears.”
In another part of the currency markets, Sterling fell 0.39% to $ 1,3281. The Australian dollar won 0.3% to $ 0.6385, and the New Zealand dollar increased by 0.11% to $ 0.5970.
In the cryptocurrency sector, Bitcoin recovered 2.7% to $ 93,671,97, violating the level of $ 90,000 for the first time since March.
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