Yahoo Finance Dollar Slumps on Trump Trade Comments
Investing.com - The U.S. dollar slumped on Friday after U.S. President Donald Trump criticized the Federal Reserve and threatened to impose fresh tariffs on China.
The U.S. dollar index, which measures the greenback’s strength against a basket of six major currencies, was down 0.65% to 94.36 as of 10:35 AM ET (14:35 GMT).
Trump said in an interview on CNBC that he is ready to impose tariffs on $500 billion worth of Chinese goods to the U.S. if China does not back down on its trade policies.
“I’m not doing this for politics, I’m doing this to do the right thing for our country” he said on CNBC’s "Squawk Box." “We have been ripped off by China for a long time.”
In another statement, Trump criticized the Fed for increasing interest rates. The Fed raised rates twice this year and is expected to raise rates at least once more before the end of the year.
St. Louis Federal Reserve Bank President James Bullard responded to Trump’s comments, saying the Fed would not be impacted.
“The [Fed] has a mandate to keep inflation low and stable and obtain maximum employment for the U.S. economy, so people can comment, including the president and other politicians, but it’s up to the committee to try to take the best action we can to achieve those objectives,” he said.
The dollar was lower against the safe-haven yen, with USD/JPY decreasing 0.71% to 111.65. In times of uncertainty, investors tend to invest in the Japanese yen, which is considered a safe asset during periods of risk aversion.
Elsewhere, the yuan recovered slightly against the dollar after China’s central bank weakened its daily reference rate. USD/CNY pair was down 0.09% to 6.7682, but was still near one-year lows after the People’s Bank of China (PBOC) weakened the fixing by 0.9% to 6.7671 per dollar on Friday.
The pound was higher, with GBP/USD rising 0.71% to 1.3105. The euro gained ground, with EUR/USD rising 0.62% to 1.1714.
Elsewhere, the Australian dollar was higher, with AUD/USD up 0.83% at 0.7416, while NZD/USD rose 0.85% to 0.6801. The loonie was higher against the greenback, with USD/CAD down 1.11% to 1.3125.
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