Dollar Plummets and Euro Soars as Trump's Criticism of Powell Intensifies
Trump's Verbal Attacks on Powell Negatively Impact Dollar and Bolster Euro's Strength
Today, the euro has reached an astounding high of $1.1717, marking its highest level since September 2021, leaving the dollar in the dust. The greenback's downward spiral isn't a recent occurrence - it's been struggling in the forex market for a while now.
The euro's upward trend can be largely attributed to the weakened dollar. Whispers of the Federal Reserve potentially lowering interest rates sooner than anticipated have put pressure on the dollar, causing it to lose ground against major currencies, while the euro thrives.
So, what's causing this sudden decline in the dollar? Rumors of an early successor to Federal Reserve Chair Jerome Powell have been swirling. Reports suggest that President Donald Trump may make this announcement as early as September or October, despite Powell holding his position until May 2026.
This premature appointment could yield a "shadow Fed chairman," according to Commerzbank analyst Michael Pfister. Such a move could cast doubt on the independence and credibility of the Federal Reserve, potentially weakening its influence in the financial world. Analyst Kieran Williams from InTouch Capital Markets concurs, expressing concerns that the Fed’s credibility could suffer if its decisions become politicized.
Donald Trump's fiery criticism of Powell is no secret. The president has labeled him everything from "terrible" to "stupid" due to Powell's cautious approach to interest rate cuts amid inflation concerns and trade tensions. Trump's eagerness to appoint a successor early could be an attempt to undermine Powell's authority and the Fed's autonomy, a move that money markets and the public might view as politically-motivated decision-making rather than economically-driven policy choices.
Sources: ntv.de, jog/dpa/rts
- Donald Trump
- Jerome Powell
- US Dollar
- Euro
- Fed
The ongoing criticism of Jerome Powell by President Donald Trump, combined with speculations of an early successor, has raised concerns about the credibility and independence of the Federal Reserve. This uncertainty in the financial world, as well as Trump's eagerness to appoint a new chair, could be contributing to the recent decline of the US Dollar and the surge in the value of the Euro, a trend closely watched by the business, politics, and general-news community. Economists believe that such changes in monetary policy could have long-lasting effects within the economic and monetary union.
