The dollar It is weakened, since there are speculations that US interest rates reductions can be made earlier and go further than it has been calculated in the markets, as President Donald Trump is increasing pressure on the president of the US Federal Bank (FED), Jerome Powell.
Bloomberg’s index for the dollar fell to the lowest level of the last three yearsafter the Wall Street Journal said Trump may announce the replacement of Jerome Powell by September or October. Traders consider the news as a message that premature interest rates are becoming more likely, as Trump has repeatedly called on Powell to reduce the cost of borrowing.
“This makes Powell less important, as everyone turns their attention to the upcoming president,” said Matthew Hawpt, a portfolio manager at the Wilson Asset Management in Sydney. “So it’s a mild slope.”
The last headlines on Powell add another dollar risk element and US government bonds, which both fall in disadvantage due to the uncertainties on the impact of duties and the expanding fiscal deficit.
Bloomberg’s dollar index fell up to 0.4% to the lowest level since April 2022. The index has now retired more than 8% this year. Merchants have boosted Fed interest rates bets in recent days and are now invoicing 66 basis points for relaxation by the end of the year for 51 basis points at the end of last week, based on one day’s swaps.
The dollar was weakened against all the basic counterparts of today Thursday (26.6.2025), with the coins of Taiwan, South Korea and South Africa earning more.
“This is definitely burdened by the big dollar,” IGNATIUS PANG, head of sales and enforcement for Asia at the Union Bancaire Privee, said in the news. Episodes of strengthening the US currency are “opportunities to actually examine the differentiation” of dollar portfolios, he said.
Powell’s potential replacements include Fed Commander Kevin Wars and National Economic Council director Kevin Hasset, said the Wall Street Journal, citing people who know the matter.