Dollar sinks to 3-year low, stocks hits fresh record amid Fed worries
The dollar sank to a more than three-year low even as global shares hit their third record high in three days on Thursday and amid growing market concerns about the Federal Reserve's independence.
The U.S. dollar index, was down nearly 0.5% on the session and more than 10% for the year. If it stays that way in the next few days it will be its biggest fall in the first half of a year since the start of the era of free-floating currencies in the early 1970s.
Powell had just wrapped up two days of testimony to U.S. Congress, where he said the central bank would be careful in considering further rate cuts as it expects Trump's tariffs would cause prices to rise this summer.
Such an appointment by Trump of a shadow Fed chair will likely shake investor confidence in the central bank's independence, which is helping to contribute to the dollar's weakness, said Wasif Latif, chief investment officer at Sarmaya Partners in New Jersey.
The euro is now at its strongest level against the dollar since 2021 and trade tariff talks are looming with Washington next week, ahead of a Trump-imposed global deadline of July 9.
The dollar weakened to a decade-low against the Swiss franc at 0.79855. It was also down 0.73% to 144.195 against the Japanese yen.
The dollar index, which measures the U.S. currency against six peers, now sits at its lowest level since March 2022 following its slide this year.
Source : Reuters
