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Trump Pressures Fed, Dollar Weighs
Thursday, 28 August 2025 08:32 WIB | US DOLLAR |DOLLAR

The US dollar started Thursday (August 28th) weakly at $98.13 after market speculation increased that a Fed rate cut would occur in September, following a signal from New York Fed President John Williams that a cut was "possible." Pressure also stemmed from President Donald Trump's increasingly aggressive efforts to influence monetary policy, attempting to fire Fed Chair Lisa Cook and replace her with a more dovish figure.

In the foreign exchange market, the DXY held steady at 98.135 after two days of declines. The euro edged up to $1.1646 despite the heated French political situation, while sterling traded at $1.3504. The dollar weakened 0.11% to 0.8017 Swiss francs, but rose 0.05% to 147.47 yen.

From Japan, Kyodo reported that top trade negotiator Ryosei Akazawa canceled a visit to Washington to discuss details of Japanese investment within the framework of a tariff agreement. The government cited administrative matters that needed to be confirmed.

Ahead of the Fed's September 16-17 meeting, the market is awaiting PCE (Friday) and employment data next week. Traders now price in an 84% chance of a 25 bps rate cut next month and anticipate a total of 56 bps of easing by year-end. The 2-year Treasury yield fell to its lowest level since May 1, adding pressure on the dollar. Trump's push to nominate a dovish candidate also put pressure on short-term debt, although the move against Cook could potentially trigger a legal dispute. The dollar weakened 0.04% to 7.1491 against the offshore yuan.

Source: Newsmaker.id

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