Market Wire, North America

The dollar is tumbling through technical barriers across most major currency pairs after US president Donald Trump told reporters “I could have it go up or down like a yo-yo,” and that he’s not concerned about its recent decline, saying “Look at the business we’re doing. The dollar’s doing great”. “If you look at China and Japan, I used to fight like hell with them, because they always wanted to devalue,” he said, but “it’s hard to compete when they devalue”. The president’s comments suggest that recent (rumoured) moves to support Japanese currency intervention—intended to raise the value of the...

Markets are celebrating TACO Tuesday on a Wednesday after US President Donald Trump dropped a threat to impose tariffs on imports from a number of European trading partners, saying that he and NATO Secretary-General Mark Rutte had “framework of a future deal with respect to Greenland and, in fact, the entire Arctic Region”. The dollar is climbing against its peers, while the Swiss franc falls amid a broader surge in risk appetite. Equity markets are rallying and US yields are edging lower. In a post on his social media platform, the president said: “Based upon a very productive meeting that...

The Trump administration sharply intensified its assault on the Federal Reserve’s independence this evening, threatening a fundamental cornerstone of the international monetary and financial system—and a key factor underpinning the dollar’s global dominance. According to multiple news sources and officials themselves, US prosecutors today served the central bank with grand jury subpoenas and a threat of criminal indictment over Chair Jerome Powell’s testimony before the Senate Banking Committee last June—in which he defended cost overruns on a long-standing headquarters renovation projection. In a video statement released on the bank’s website, Powell dismissed the scrutiny as a politically-motivated attempt to undermine...

The Federal Reserve cut rates for a third consecutive time this afternoon, and opened the door to a January pause amid growing uncertainty on the economy’s underlying trajectory. In the widely-expected decision, the Federal Open Market Committee voted by a surprisingly balanced 9-to-3 margin to lower the target range for the federal funds rate to between 3.50 and 3.75 percent. Trump appointee Stephen Miran against dissented from the majority in favour of a bigger move, while Austan Goolsbee and Jeffery Schmid supported staying on hold. Markets had feared a more profound divergence would be on display, given that the October...