financetom
News
financetom
/
News
/
US dollar trades in a tight range ahead of Trump's Fed appointment decisions
News World Market Environment Technology Personal Finance Politics Retail Business Economy Cryptocurrency Forex Stocks Market Commodities
US dollar trades in a tight range ahead of Trump's Fed appointment decisions
Aug 6, 2025 4:58 AM

The US dollar remained confined within its recent trading range on Wednesday, as investors chose to stay neutral following another round of weak US economic data and ahead of President Donald Trumps upcoming appointment to the Federal Reserve Board.

Trump said on Tuesday that he would decide on a nominee to replace outgoing board member Adriana Kugler by the end of the week, and has narrowed the shortlist for the next Fed Chair to succeed Jerome Powell to four candidates.

That same day, data showed that US services sector activity remained unexpectedly flat in July, while input costs surged at their fastest pace in nearly three years, highlighting the economic impact of Trumps tariffs, which are also starting to weigh on corporate profits.

Still, traders were cautious about entering new positions until the Federal Reserves direction becomes clearer, amid growing concerns that partisan loyalty could creep into the traditionally reserved and independent world of monetary policy.

The dollar last rose by 0.1% against the Japanese yen to 147.78, while the euro held steady at $1.1577. The British pound slipped 0.1% to $1.329.

Francesco Pesole, strategist at ING Bank, wrote in a research note: Trumps public attacks on the Bureau of Labor Statistics over job data revisions havent had a major market impact so far, but itll be telling if the new Fed Chair nominee echoes that narrative. If that happens, it could fuel fears of the Fed disconnecting from official data a scenario we view as clearly negative for the dollar.

Although the dollars moves have been quiet this week, the currency has yet to recover from Fridays sharp losses its biggest single-day drop in nearly four months after a troubling jobs report.

Trump had fired BLS Commissioner Erica McEnturfer last week following the release of Julys jobs report.

The dollar rose by 0.1% against a basket of currencies to 98.785, still well below Fridays high of 100.25, reached just before the nonfarm payrolls data was released.

Markets are still pricing in an 86.5% chance of a Fed rate cut in September, with roughly 56 basis points of easing priced in by year-end.

However, data such as Tuesdays ISM services PMI highlights the complexity of the Feds challenge balancing price pressures from Trumps tariffs with signs of a weakening US economy.

Ray Attrill, head of FX strategy at National Australia Bank (NAB), said: The ISM services index clearly smells of stagflation and thats a double-edged sword in terms of monetary policy implications.

He added: For now, we think the market may be showing too much confidence in a September move being a done deal.

US Treasury yields rose, with the 10-year yield climbing 4.2 basis points to 4.238%, and the 2-year yield rising 2.9 basis points to 3.774%, after a $58 billion auction of three-year notes that analysts viewed as relatively weak, with a bid-to-cover ratio of 2.53.

More auctions are scheduled this week, including $42 billion in 10-year notes on Wednesday and $25 billion in 30-year bonds on Thursday.

Among other currencies, the Australian and New Zealand dollars both rose 0.3%, with the Aussie reaching $0.64895 and the Kiwi at $0.59181.

Comments
Welcome to financetom comments! Please keep conversations courteous and on-topic. To fosterproductive and respectful conversations, you may see comments from our Community Managers.
Sign up to post
Sort by
Show More Comments
Related Articles >
How has China positioned itself as the winner and beneficiary of the global energy crisis?
How has China positioned itself as the winner and beneficiary of the global energy crisis?
Apr 9, 2026
No country was better prepared for a war with Iran than China. While the rest of Asia suffers from oil and gas supply shortages as a result of the war, Beijing appears to be in a comfortable position thanks to its massive crude oil reserves and its enormous clean energy infrastructure. Over the past years, China has worked to develop...
Euro on track for second weekly profit in row on Iran war truce
Euro on track for second weekly profit in row on Iran war truce
Apr 10, 2026
The euro fell in European trading on Thursday against a basket of global currencies, for the first time in the last five days against the US dollar, giving up its five-week high due to correction and profit-taking operations. Despite this decline, the single European currency remains on its way toward achieving its second consecutive weekly gain, amid improved sentiment in...
Kiwi shines after bullish stance by central bank
Kiwi shines after bullish stance by central bank
Apr 10, 2026
The New Zealand dollar fell in Asian trading on Friday against a basket of major and minor currencies, giving up its two-week high against its American counterpart due to correction and profit-taking operations. Despite this decline, the New Zealand currency remains on track to achieve its largest weekly gain since last January, thanks to the Reserve Bank of New Zealand's...
Middle East truce pushes dollar to worst weekly loss since January
Middle East truce pushes dollar to worst weekly loss since January
Apr 10, 2026
The dollar declined on Friday and is heading to record its largest weekly drop since January, as investors sell safe-haven assets amid optimism that oil shipments may resume if the truce in the Gulf holds. The dollar had risen strongly in March as one of the most prominent safe havens, after the American and Israeli war on Iran led to...
Copyright 2023-2026 - www.financetom.com All Rights Reserved