The U.S. dollar’s strength continued to erode against major rivals on Tuesday, with investors rattled by fresh criticism from U.S. President Donald Trump over the policies of the Federal Reserve.
The ICE U.S. Dollar Index DXY, -0.18% extended losses a day after a report surfaced Monday that Trump criticized Fed Chairman Jerome Powell at a fundraiser, saying he hadn’t been much of a cheap-money central banker. Trump, who appointed Powell, has previously expressed dislike of the Fed’s tighter monetary policy and a strong dollar.
The ICE dollar gauge was down 0.3% to 95.585 on Tuesday, a day after slipping below 96 for the first time in about a week, according to Dow Jones Market Data.
The index is facing its fifth-straight losing session, which would mark the first such streak since the start of the year, according to FactSet. Central banks will stay in focus for investors this week with Powell himself due to speak at 10 a.m. Eastern on Friday at the central banker symposium at Jackson Hole.
If repeated enough, such criticisms of the Fed by Trump could “exert a powerful influence over market expectations,” but may also produce “diminishing returns” for him, said Neil Wilson, chief market analyst at Markets.com, in a note to clients.
“I think on this one the market will come round again and the dollar bounce back, but nonetheless it does appear the market is worried that the president will exert influence on Fed policy,” Wilson said.
Read: Here’s how Jackson Hole could impact the dollar, bonds and emerging markets
The euro EURUSD, +0.3657% was benefiting the most from dollar weakness, rising to $1.1512 from $1.1484 late in New York on Monday.
Read: Greece exits bailout, but ‘public debt tragedy’ persists
The pound GBPUSD, +0.2188% rose to $1.2828 against the dollar from a late-Monday level of $1.2795. On Tuesday, Britain’s Brexit minister, Dominic Raab, will hold talks with the EU’s chief negotiator, Michel Barnier, to discuss the future relationship between the U.K. and the euro area. While risks have been rising the U.K. was facing a no-deal exit, Raab commented over Twitter Tuesday that he was “confident” a deal could be struck.
The Turkish lira USDTRY, +0.5673% which has dramatically slid over the past few weeks amid a diplomatic split between Turkey and the U.S., was modestly weaker against major rivals. One dollar last bought 6.1080 lira, up from 6.0158 lira late Friday in New York. The euro fetched 7.0052 lira, up 1.8% from Friday, according to FactSet.
Read: Turkey’s woes won’t trigger a full-blown crisis across emerging markets, economist says
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