The massive sale of USD and American assets in general has resumed. President Trump’s comment last week about the future of the president of the Fed, when he said that the ‘termination’ of the Fed president could not arrive soon enough, was followed on Friday by a comment from the president of the Council of Economic Advisors of the White House, Kevin Hassett, who indicated that the president was studying if he could dismiss the president of the Fed. The threats to the independence of the Fed have scared the investors, Shaun Osborne, Estratega Chief of FX of Scotiabank.
The USD, the US shares and bonds
“The political interference in the formulation of Fed policies would erode confidence in the USD and could promote long -term inflation. There is a wide literature that shows a high correlation between the independence of the central bank and a low and stable inflation. It is not clear in the law if the president can fire the president of the Fed. However, it has been subject to speculation in recent weeks. A possible ‘alternative solution’ Powell long before his mandate ended in 2026;
“Regardless, investors do not need more excuses to sell US assets at this time, amid concerns about the impact of the president’s tariff policy. Friday’s CFTC data show a clear and significant weakening in the feeling towards the USD in recent weeks. The only surprise in these data is perhaps that there are still pockets of the market that cling to long net positions in USD coverage) and that the market is not really much shorter in USD at this time. “
“The risk of an additional and significant fall in the USD seems to be increasing. EUR is the currency with the best development of the session, rising more than 1%; It is not a coincidence that the CDE independence credentials are impeccable. There are no important US data reports today and only a few key reports during the week. Investors will be monitoring what data reports we get to help solve the apparent enigma reflected in the weak ‘soft’ (surveys) data and the resilient ‘hard’ data recently. A suggestion is that disparity can reflect a short -term activity burst before the 90 -day tariff pause window closes. “
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
