Sunday, 17 November 2019

Dollar weakens after Trump’s Fed comments

FILE PHOTO: Bundles of banknotes of U.S. Dollar are pictured at a currency exchange shop in Ciudad Juarez, Mexico, January 15, 2018. REUTERS/Jose Luis Gonzalez/File Photo

HONG KONG: The dollar dipped Tuesday in Asia after Donald Trump hit out at the Federal Reserve´s interest rate rises and accused it of not backing his economic plan, while most equity markets edged up ahead of highly anticipated China-US trade talks.

The greenback has been on the ascent in recent months as US borrowing costs have gone up and the economy improves, but it stumbled after Trump´s latest criticism of the central bank.

In an interview with Reuters, the president said he was “not thrilled” with the rate rises under new Fed boss Jerome Powell, repeating comments made last month about the bank´s tightening measures.

When asked if he believed in the Fed´s independence, he refused to say yes, telling the reporter: “I believe in the Fed doing what´s good for the country.”

Trump also accused the European Union and China of manipulating their currencies, adding that Beijing was weakening the yuan to offset the effects of US tariffs.

While analysts said it was unlikely Trump´s remarks would make much difference to the Fed´s decision-making — Powell has said in the past “we don´t take political considerations into account” — the greenback was weaker against most other currencies.

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