
Dollar drops but maintains modest weekly gains
Data on Tuesday showed that consumer prices rose in June, though the increase was seen as moderate. Wednesday's producer price inflation report, meanwhile, showed that prices were steady last month.
Powell has said he expects inflation to rise this summer as a result of Trump's tariff policies, which has pushed out expectations on when the U.S. central bank is likely to cut rates.
But the labor market is showing signs of weakness even as headline job gains and the unemployment rate remain relatively solid.
'We're waiting on the tariffs to become real and not just a negotiating ploy and waiting on the labor market to reveal itself,' said Lou Brien, strategist at DRW Trading in Chicago.
'Layoffs are at a lower level than they were pre-pandemic, but the hiring is terrible. And if, all of a sudden, the layoffs come up, we're going to get a significant increase in the unemployment rate very quickly,' Brien said.
Fed governor Chris Waller said on Friday that he favors a rate cut at the July meeting because he feels the tariffs are likely to have a limited impact on inflation. He added that underlying data "are not indicating a super healthy private sector labor market," and the Fed should "get ahead" of a possible hiring slowdown.
Waller's comments come amid near daily criticism by Trump of Powell over the Fed's reluctance to cut rates. The dollar tumbled on Wednesday on reports that Trump was planning to fire the Fed Chair, but rebounded after Trump denied the reports. Powell's term will end in May.
Fed funds futures traders are pricing in 45 basis points of cuts by year-end, implying that two 25 basis point cuts are seen as most likely, with the first coming in September.
The dollar index was last down 0.26% on the day at 98.25, and is on track for a 0.39% weekly gain.
The euro gained 0.49% to $1.1652 but is headed for a weekly drop of 0.31%.
Sterling rose 0.27% to $1.3451 and is heading for a weekly decline of 0.32%.
The Japanese yen, meanwhile, was slightly higher against the greenback heading into Sunday's upper house election in which Japan's ruling party looks vulnerable.
The dollar weakened 0.09% to 148.46 yen, but is on track for a weekly gain of 0.71%.
Polls suggest Japan's ruling coalition is at risk of losing its majority, which would stir policy uncertainty at home and complicate tariff negotiations with the United States.
U.S. Treasury Secretary Scott Bessent told Japanese Prime Minister Shigeru Ishiba that their countries can reach a "good agreement" on tariffs, Ishiba said on Friday after meeting Bessent in Tokyo.
In cryptocurrencies, bitcoin fell 0.78% to $118,552, holding below a record $123,153 reached on Monday.
The U.S. House of Representatives on Thursday passed a bill to create a regulatory framework for U.S.-dollar-pegged cryptocurrency tokens known as stablecoins, sending the bill to Trump, who is expected to sign it into law.
(Reporting by Karen Brettell. Additional reporting by Kevin Buckland and Alun John. Editing by Mark Potter)
Hashtags

Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles

The National
2 hours ago
- The National
Trump's AI plan seeks to remove regulatory barriers and shuns DEI
President Donald Trump on Wednesday unveiled a three-pillared strategy that his administration refers to as America's AI Action Plan, after much anticipation from US technology companies. Accelerating artificial intelligence innovation, building AI infrastructure in the US and leading in AI diplomacy are the strategy's three main sections. Mr Trump was expected to speak in greater detail about the AI strategy at an event in Washington later on Wednesday. Like many of Mr Trump's initiatives, his proposal seeks to portray former president Joe Biden's AI strategy as burdensome from a regulatory perspective and full of identity politics and environmental red tape. President Trump's plan directs the National Institute of Standards and Technology to 'revise the AI management framework, eliminating references to diversity, equity and inclusion, misinformation and climate change'. The AI push also looks at issues many experts consider more pertinent to the global AI race. It seeks to streamline the construction permit process for data centres, which are becoming critical to AI breakthroughs. The plan also emphasises exporting 'American AI technologies through full-stack deployment packages and international data centre initiatives led by the Department of Commerce'. That sort of data centre deal is similar to what was unveiled during President Trump's visit to the UAE in May. Then, President Sheikh Mohamed and Mr Trump announced plans for a new 5GW UAE-US AI Campus in Abu Dhabi. If more of those deals come to fruition, it could help the US gain influence as other countries seek to join the race to provide computational power for AI. Hypothetically, it could also give the US a competitive edge over China, which also aims to be a dominant AI player. With his AI Action Plan, Mr Trump is attempting to put the kibosh on local regulatory efforts within the US. State legislative bodies have passed laws to put guardrails on AI in an effort to protect workers from labour disruption. 'Prohibit federal AI funds from going to states with restrictive AI regulations,' reads one of the plan descriptions, also insisting that such prohibitive policies 'respect states' legislative rights'. On a technical level, proponents of open-source AI development are likely to take a victory lap after Mr Trump's plan. It throws support behind open-source and open-weight AI models. Supporters of open-source AI models often say they democratise artificial intelligence, whereas closed-source models only allow for those with access to larger computing infrastructures to develop the technology. Neil Chilson, former chief technologist for the Federal Trade Commission and currently head of artificial intelligence policy at the Abundance Institute, called the AI plan a 'course correction' from the previous policies of the Biden White House. 'We're particularly excited to see the emphasis on removing regulatory barriers to AI adoption and deployment and streamlining of infrastructure permitting,' he said. Over at the Competitive Enterprise Institute think tank, reaction to President Trump's plan was more tepid, alleging that the AI plan still exerted too much regulatory control. 'The plan's push for international AI standards is similar to the European Union's stultifying regulatory harmonization, which, among other things, is locking the continent into USB-C technology for years to come, even as better technologies emerge,' said Ryan Young, Senior Economist with the Competitive Enterprise Institute. According to White House officials, President Trump is pushing 90 federal policy actions in the plan, which comes after he sought public input for a comprehensive AI policy in February. Tech companies, academics and advocacy groups submitted ideas. Consumer rights, labour and environmental groups outlined areas of concern within Mr Trump's less restrictive stance on AI. Several organisations, such as the Electronic Frontier Foundation, were concerned the tech industry would have too much influence in crafting the AI plan. 'While current machine-learning technologies have some positive applications, they are also being adopted in consequential decision-making contexts where these emerging technologies are likely to cause harm and unlikely to deliver the promised benefits,' the EFF wrote in a March letter to the White House. During a conference call with reporters, the White House disagreed with the narrative that tech firms had amassed more influence. 'It was probably one of the most diverse set of individuals from across the country and across different sectors, from civil society to Hollywood to academia to the private sector,' a White House official said. The Trump administration said it had received more than 10,000 responses to the requests for guidance, from which it moulded the AI plan. Early in Mr Trump's second term, he signed an executive order that rescinded Mr Biden's executive order on AI. That order acknowledged the tremendous potential upside of AI and encouraged the acceleration of vital AI standards, but was also geared towards implementing guardrails to protect consumers. 'Developers of the most powerful AI systems [must] share their safety test results and other critical information with the US government,' a portion of Mr Biden's executive order read. That policy is largely absent from President Trump's plan.


Zawya
3 hours ago
- Zawya
Trump again calls for Fed board to act, says Powell 'doesn't get it'
U.S. President Donald Trump on Wednesday reiterated his criticism of Federal Reserve Chairman Jerome Powell amid his ongoing call for lower rates, and called on the central bank's board to act. "Our Rate should be three points lower than they are, saving us $1 Trillion per year (as a Country). This stubborn guy at the Fed just doesn't get it — Never did, and never will. The Board should act, but they don't have the Courage to do so!" Trump wrote on his social media platform. (Reporting by Bhargav Acharya; writing by Susan Heavey)


Al Etihad
6 hours ago
- Al Etihad
Stock markets rally after Japan-US trade deal
23 July 2025 16:31 LONDON (AFP)Stock markets rose on Wednesday after Japan and the United States hammered out a trade deal to slash Donald Trump's tariffs, including those on the crucial car were also cheered by news that Washington had reached agreements with Indonesia and the Philippines, stoking optimism that other countries will also follow suit before Trump's August 1 FTSE 100 was up 0.5 percent, after hitting another record high at the piled on one percent and Frankfurt also advanced, tracking gains in surged over three percent after the US president announced a deal lowering tariffs on some Japanese goods to 15 percent, down from the threatened 25 deal will also reduce tolls on autos -- an accounting sector for eight percent of Japanese jobs -- to 15 percent, compared, with 25 percent for other countries. In return, Japan pledged to invest $550 billion in the United States, Trump said on social in carmaker Toyota rocketed higher by more than 14 percent, Mitsubishi 13 percent and Nissan eight carmakers also rallied, with Porsche rising over seven percent, while Volkswagen and BMW were up around six percent in Paris, Stellantis topped the gainers on the CAC 40, advancing close to seven also hailed an agreement with Manila to lower levies on Philippine goods by one percentage point to 19 percent, while tariffs on Indonesia were slashed from 32 percent to 19 in Manila and Jakarta announcements boosted hopes of other deals before next Friday's deadline, though talks with the European Union and South Korea remain 10-year government bond yield soared to the highest since 2008. Elsewhere in Asia, Hong Kong hit its highest level since late 2021, while Shanghai was advances came after a broadly positive day on Wall Street where the S&P 500 hit another peak but the Nasdaq snapped a six-day streak of records. Eyes are also on the release of earnings from Google parent Alphabet and tech giants, including Tesla and Intel.