SINGAPORE — The US dollar drifted on Thursday as investors fretted about the Federal Reserve’s independence after yet another attack from President Donald Trump ahead of remarks from Chair Jerome Powell later this week that could influence the outlook for rates.
Trump called on Fed Governor Lisa Cook to resign on the basis of allegations made by one of his political allies about mortgages she holds in Michigan and Georgia, intensifying his effort to gain influence over the US central bank.
Cook said she had “no intention of being bullied to step down” from her position at the central bank. Trump has also told aides he is considering trying to fire Cook, the Wall Street Journal reported on Wednesday.
“It has the potential to raise questions around the Fed’s oversight and regulatory functions but it has little to no near-term monetary policy implications,” said Prashant Newnaha, senior Asia-Pacific rates strategist at TD Securities.
That explained the relatively subdued reaction in the currency markets to the news as the dollar initially dipped but was mostly calm in listless trading in Asian hours.
The Japanese yen held onto gains made in previous sessions and was little changed at 147.36 per dollar, while the euro was steady at $1.1646. The dollar index, which measures the US currency against six other peers, was steady at 98.301, on course for a 0.4 percent rise this week.
