Dollar pinned near four-year low after Trump comments fuel selling
The dollar steadied on Wednesday, but was still set for its biggest weekly fall since April after U.S. President Donald Trump brushed off this month's slide, prompting concern from European central bankers over the strength of the euro.
Other currencies and gold have shot up in recent weeks as investors have grown more nervous about their U.S. exposure.
The euro topped $1.2 for the first time since 2021, the pound hit 4-1/2-year highs, while the yen is set for its strongest monthly performance against the dollar since April, as speculation of joint Japanese-U.S. official intervention to support the Japanese currency persists.
The dollar index , which tracks its performance against six other currencies, rose 0.3% to 96.216, but remained near four-year lows, having lost nearly 2.7% since last Wednesday, its steepest weekly decline since April's "Liberation Day" market turmoil.
The dollar weakness may offer some respite to Japanese officials, but is already a source of concern for others.
Two European Central Bank officials said on Wednesday the strength of the euro could influence monetary policy. Austrian central bank governor Martin Kocher told the Financial Times the ECB may have to consider another interest-rate cut if the strength of the euro starts to affect the outlook for inflation.
Bank of France Governor François Villeroy de Galhau said in a LinkedIn post that policymakers were "closely monitoring the appreciation of the euro and its potential impact on lower inflation".
The euro fell by as much as 0.63% to a session low of $1.19623. It was last down 0.5% on the day at $1.19715, but still set for a 2% gain this month.
The Japanese yen has been a major beneficiary of the drop in the dollar, surging over 1% to a three-month high of 152.10 per U.S. dollar on Tuesday. It had softened a touch on Wednesday, leaving the dollar up 0.2% at 152.43.
Source: Reuters.com
