The dollar is falling against the pound and euro on Tuesday morning after US President Donald Trump publicly criticised the Federal Reserve for raising interest rates.
Treasury Secretary Steven Mnuchin recently told reporters that he had personally spoken to Trump about the central bank and that the president respects the independence of the Federal Reserve. But during this period of time I should be given some help by the Fed.
The Fed has raised interest rates twice this year and is expected to do so again next month with consumer price inflation rising to 2.9 per cent in July, its highest level in six years, and unemployment at 3.9 per cent, the lowest level in about 20 years.
USA stock prices dipped after Trump's comments to Reuters and the USA dollar.DXY edged down against a basket of currencies.
There are a total of seven governors on the Fed Board, all of whom have a vote on setting interest rates, and Trump still has one remaining vacancy to fill should his current slate of nominees win approval from the Senate.
During the previous episode of Fed criticism, the White House maintained that Trump respected the central bank's independence.
A Fed spokesman declined to comment on Trump's remarks on Monday.
"Most Fed-watchers are of the view that Powell is emphasising the need for financial stability and with a positive USA economic backdrop is obliged to tighten policy".
Raising interest rates would increase the costs of borrowing money, which could slow economic growth and job gains.
"I am not happy about it". Fed Chairman Jerome Powell said a discussion on the operating framework of monetary policy would likely take place "in the fall", according to the minutes. In a confirmation hearing a year ago, shortly after Mr. Trump nominated him to the position, he told senators he expected the Fed to continue raising interest rates in the near term. Powell may update his outlook when he gives a speech Friday on "Monetary Policy in a Changing Economy" at the Kansas City Fed's annual forum in Jackson Hole, Wyoming. "And I think the euro is being manipulated also", Trump said.
"We're going to do our business in a way that's strictly non-political, without taking political issues into consideration, and that carries out the mandate Congress has given us", he said.
Mr. Trump's comments about Mr. Powell were first reported by Bloomberg.