Dollar Stays Weaker on Fed Independence Concerns
0640 GMT – The dollar remains under pressure after hitting a three-year low Monday following renewed calls from President Trump for interest rate cuts. In a post on his Truth Social platform, Trump said there is 'virtually no inflation' and warned the U.S. economy would slow if the Fed doesn't immediately cut rates. His comments triggered a broad selloff in U.S. assets on rising concerns over Fed independence, Deutsche Bank analysts say in a note. 'While potential risks to Fed independence had already generated headlines in recent weeks, yesterday's market moves were the clearest sign yet of investor anxiety over the topic.' The DXY dollar index falls 0.1% to 98.159 after reaching a low of 97.921 on Monday.(renae.dyer@wsj.com)
0429 GMT — The Japanese yen should continue to perform well in a global risk-off scenario, says Daniel Tan at Grasshopper Asset Management. Japan's domestic data have shown steady progress toward the Bank of Japan's stable inflation target, heightening the possibility of a BOJ rate hike at its May 1 meeting, says the portfolio manager. Meanwhile, trade tariffs could raise U.S. inflation and might also have the countervailing effect of weakening long-term U.S. growth, which could push the Fed closer to a rate cut this year. The combined effect of global risk-off sentiment and lower U.S. rates would mean that the yen has more room to appreciate from the current level of around 141 versus the USD, Tan says in a note.(monica.gupta@wsj.com)
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