A look at the day ahead in European and global markets from

Ankur Banerjee

Just as investor sentiment was recovering from the latest

geopolitical jolt, buoyed by the Israel-Iran ceasefire,

President Donald Trump rattled markets again with an attack on

the Fed chair that revived worries over the central bank's

independence.

The result has been another bout of dollar selling,

which pushed the euro to its strongest level since

November 2021 and the Swiss franc to its highest in a

decade.

A report from the Wall Street Journal said Trump has toyed

with the idea of naming Fed Chair Jerome Powell's replacement as

early as September, which could undermine Powell's authority for

the remainder of his term to next May.

Trump has repeatedly chastised Powell for not cutting

interest rates and said he was "terrible" in the latest attack

on Wednesday, eroding investor faith in the U.S. central bank's

independence in setting policy.

Earlier this month, Trump openly contemplated firing Powell

and even mused about making himself the Fed chair, although he

subsequently backed off.

"I know within three or four people who I'm going to pick,"

Trump told reporters on Wednesday, when asked if he is

interviewing candidates to replace Powell.

All that uncertainty, along with Trump's chaotic trade

policies and their potential threat to economic growth, have

taken a toll on the U.S. dollar as investors look to move their

money elsewhere.

The dollar index, which measures the currency against

six other units, is down 10% this year and on course for a sixth

straight month in the red. The last time it had a run like this

was in 2017.

While the "sell America" theme has faded somewhat in the

past few weeks, as evidenced by U.S. stocks hitting record

highs, investors remain worried about the dollar and how Trump's

tariff policies could affect it.

Trump's tariffs are coming back onto the markets' radar as

the clock ticks down to his July 9 deadline for trade deals.

In Thursday's Asia trade, futures indicated a muted open for

European stock markets. Investors will keep an eye on defence

stocks after NATO leaders backed the big increase in defence

spending that Trump had demanded.

The big news in the corporate world was Shell

denying it was in talks to buy British rival BP, after

the Wall Street Journal reported on Wednesday that the oil

majors were in early discussions about a takeover.

Key developments that could influence markets on Thursday:

Economic events: Germany Gfk consumer sentiment for July

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