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Dollar weakens after Trump criticises Fed

LONDON – The dollar weakened on Tuesday after US President Donald Trump criticised the head of the Federal Reserve for raising interest rates.

Trump told Reuters in an interview on Monday that he was “not thrilled” with Jerome Powell’s rate hikes and said the US central bank should do more to help him to boost the economy.

US presidents rarely criticise the Fed, whose independence is considered important for economic stability.

But Trump has made reducing US trade deficits a priority, and the combination of rising interest rates and a strengthening dollar poses risks for export growth.

The dollar index against a basket of six other currencies fell 0.4 percent to 95.544 after touching 95.440, its lowest since 9 August.

Escalating trade tensions between the United States and its trading partners as well as a plunge in the Turkish lira have pushed the dollar index up recently.

But the greenback weakened on Tuesday as investors ditched it as a safe haven before China and the United States hold talks this week that may help ease their dispute over trade.

Trade tensions have on the whole helped the dollar, which benefits from geopolitical turmoil as the market seeks out less risky investments.

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