Dollar Weakens on Fed Rate Cut Signals & Trump Pressure – Urgent Breaking News
The US dollar took a hit Friday, succumbing to pressure from a surprising call for a July interest rate cut by Federal Reserve official Christopher Waller, coupled with continued calls from President Donald Trump for looser monetary policy. The greenback’s decline follows a bullish week, making the shift particularly notable for investors tracking currency movements. This is a developing story with potential ripple effects across global markets, and we’re bringing you the latest updates as they unfold. For those following Google News and seeking real-time financial updates, this is a critical development.
Fed Official Waller Advocates for July Rate Reduction
Christopher Waller, a member of the Federal Reserve, publicly stated he’s open to lowering interest rates as early as July, expressing concern that delaying action could be more damaging to the economy than acting preemptively. “I will try to convince them of the interest of my position,” Waller said on Bloomberg TV, adding that the ultimate decision will be data-dependent. This stance, while not yet mainstream within the Fed, is significant, as Waller has previously been considered a more hawkish voice. His comments immediately impacted market sentiment, pushing the dollar lower against major currencies.
At around 6:35 p.m. GMT, the dollar had lost 0.22% against the euro, trading at 1.1622 dollars. Other currency pairs also reflected the shift: EUR/JPY moved to 172.82, EUR/CHF to 0.9315, EUR/GBP to 0.8664, USD/JPY to 148.76, and USD/CHF to 0.8015. (See full data at the end of this article.)
Trump’s Continued Push for Lower Rates
Adding to the downward pressure on the dollar, President Trump reiterated his desire for “a marked drop in interest rates,” claiming the American economy is “in great shape” and inflation is “very low.” While the Fed operates independently, the President’s public pronouncements often influence market expectations and add a layer of political complexity to monetary policy decisions. Analysts note a growing pattern of the Trump administration attempting to influence the Fed towards a more accommodative stance.
Market Reaction & Expert Analysis
“Mr. Waller ‘is perhaps the only one to recommend a drop in rates in July, but this weighs on the greenback,’” noted Marc Chandler of Bannockburn Capital Markets. Brad Bechtel, from Jefferies, pointed out that summer trading often amplifies market reactions, as volumes tend to be lower and dominated by short-term traders. Derek Halpenny, an analyst at MUFG, highlighted the broader trend of the Trump administration’s efforts to influence the Fed.
Understanding the Bigger Picture: Interest Rates & Currency Valuation
Interest rates play a crucial role in currency valuation. Higher interest rates typically attract foreign investment, increasing demand for a country’s currency and driving up its value. Conversely, lower interest rates can make a currency less attractive to investors, leading to depreciation. The Fed’s decisions on interest rates are therefore closely watched by traders and investors worldwide. This is a core principle of SEO for financial news – understanding the underlying concepts is key to attracting informed readers.
The current situation is particularly interesting because it highlights a divergence between the Fed’s traditional focus on inflation and employment data, and the political pressure to stimulate economic growth. Historically, the Fed has prioritized maintaining price stability, but the Trump administration appears to be prioritizing short-term economic gains, even if it means potentially risking higher inflation down the line. This tension is a key factor driving market volatility.
Furthermore, the recent discussion about potentially dismissing Fed Chair Jerome Powell, though downplayed by Trump as “very improbable,” underscores the unprecedented level of political interference in monetary policy. This adds a layer of uncertainty to the outlook for the dollar and the US economy.
Profit Taking & Short-Term Trading Dynamics
Beyond the fundamental factors, the dollar’s decline was also attributed to “profit taking” after a strong week. Traders who had bet on a stronger dollar were taking their gains, contributing to the downward pressure. This is a common phenomenon in financial markets, particularly after periods of sustained gains.
Breaking news like this requires constant monitoring. Archyde.com will continue to provide updates as the situation evolves, offering in-depth analysis and expert commentary to help you navigate the complexities of the global financial landscape.
Friday lessons Thursday lessons
| 18H35 GMT | 21H00 GMT | |
|---|---|---|
| EUR/USD | 1,1622 | 1,1596 |
| EUR/JPY | 172,82 | 172,29 |
| EUR/CHF | 0.9315 | 0.9329 |
| EUR/GBP | 0,8664 | 0,8643 |
| USD/JPY | 148,76 | 148,58 |
| USD/CHF | 0,8015 | 0,8045 |
Source: AFP, Bloomberg, Bannockburn Capital Markets, Jefferies, MUFG
