Trump’s Fed Broadside Saps Dollar as Markets Await Board Nominee

Mounting concerns over the Federal Reserve’s independence and the reliability of U.S. economic data are weighing on the dollar after President Donald Trump stepped up attacks on Fed policy and dismissed Bureau of Labor Statistics commissioner Erika McEntarfer. A Reuters survey of foreign-exchange strategists conducted 1-5 August projects the euro will rise to about $1.17 by October and $1.20 within a year, with the greenback already down nearly 9% against a basket of major currencies in 2025. Analysts say the pressure reflects investor unease that partisan influence could shape monetary policy and official statistics. Futures markets are pricing in a better-than-90% probability of a Federal Reserve rate cut in September and roughly 58 basis points of easing by year-end. The dollar index hovered near 98.8 in Asian trading on Wednesday, little changed as traders waited for Trump to name a replacement for outgoing Fed Governor Adriana Kugler—a decision he has pledged to make by week’s end. Safe-haven demand lifted gold to its highest level in almost two weeks, while benchmark Treasury yields remain subdued. Strategists warn that a nominee perceived as overly dovish or politically aligned with Trump could deepen skepticism toward Fed independence and keep downward pressure on the U.S. currency.