The US dollar strengthened against other major currencies on Thursday, following President Donald Trump's latest comments about the possibility of firing Federal Reserve Chairman Jerome Powell. While Trump denied any intention to fire Powell, he continued to criticize the central bank for its reluctance to cut interest rates, stoking concerns about political interference in US monetary policy.
Elsewhere, the British pound fell 0.2% to $1.3395 after data showed slowing wage growth and a drop in the number of jobs. Rising UK inflation also added to pressure on the Bank of England to cut interest rates soon. Meanwhile, the euro also weakened against the US dollar, while the Australian and New Zealand dollars fell sharply after disappointing jobs data.
The Japanese yen continued to slide to a one-year low against the euro, weighed down by uncertainty ahead of a key election and the failure to reach a trade deal with the US before the August 1 tariff deadline. Concerns that Prime Minister Shigeru Ishiba's coalition will lose its majority in the upper house also weighed on investor sentiment towards the Japanese currency. Weak Japanese export data showed the early impact of US tariffs.
Analysts expect uncertainty to rise further if the Fed is seen to bow to political pressure, undermining the credibility of the world's most influential monetary institution.
