Dollar surges then steadies as Trump backs down on Fed attacks

Ankur Banerjee - Reuters - 05:59
The U.S. dollar rose sharply and then steadied on Wednesday as President Donald Trump backed away from threats of firing Federal Reserve Chair Jerome Powell in a relief to investors while optimism around trade deals lifted beaten down sentiment.
  • After soaring initially, dollar steadies against most currencies
  • Trump backs away from threat to fire Fed's Powell
  • Optimism around trade deals soothe investor worries
SINGAPORE, April 23 (Reuters) - The U.S. dollar rose sharply and then steadied on Wednesday as President Donald Trump backed away from threats of firing Federal Reserve Chair Jerome Powell in a relief to investors while optimism around trade deals lifted beaten down sentiment.
The markets this week have been grappling with the notion that the Fed's independence could be under threat after repeated attacks by Trump on Powell for not cutting rates since the president resumed office in January.

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But late on Tuesday Trump appeared to back down.
"I have no intention of firing him," Trump told reporters in the Oval Office on Tuesday. "I would like to see him be a little more active in terms of his idea to lower interest rates."
That left the dollar rising rapidly at the start of the trading day in Asian hours, but it steadied by mid-morning.
The dollar rose more than 1% against the yen to 143.21 in early trading and was last slightly stronger at 141.77. Against the Swiss franc , the dollar was last 0.29% stronger at 0.8216, having jumped more than 1% earlier in the session.
The euro stood at $1.14, while sterling eased 0.17% at $1.3311.
The dollar had been trading near multi-year lows versus the euro and the Swiss franc on Tuesday, while the yen hit a seven month high as investors dumped U.S. asse...
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