Like a child caught between warring parents, the US dollar struggled on Tuesday as President (of the United States) Donald Trump criticised Chairman (of the Federal Reserve) Jerome Powell’s rate-hiking policy.
Having already voiced his displeasure at the Fed’s greenback-boosting actions earlier in the summer, Trump took another shot at the central bank on Monday. At a fundraiser in the Hamptons the President reportedly questioned why the rate rises were happening given the strength of the US economy, further putting pressure on the (admittedly independent) Fed to hold off on the 2 hikes planned for the rest of 2018.
This left the dollar – which, granted, can afford to continue to give back some of its recent rocket-strapped growth – a bit down in the dumps after the bell. Against the pound it shed 0.3%, allowing cable to hold above $1.28, while against the euro it fell 0.4%, sending the single currency to an 11 day, $1.15-plus peak.
With their currencies on the rise, this in turn led to a subdued start from the European indices, despite positive US and Asian sessions overnight. While the DAX and CAC managed to sit unchanged after the bell, the FTSE actually fell 30 points, its pesky commodity sector refusing to celebrate the dollar’s own dip.
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