Aussie dollar climbing back toward a seven-month high

Key Movers

The US dollar came under sharp selling pressure on Thursday, following President Donald Trump's renewed criticism of Federal Reserve (Fed) Chair Jerome Powell. Speaking after Mr Powell’s semi-annual testimony before the Senate on June 24–25, Trump condemned the Fed Chair's resistance to cutting interest rates in upcoming policy meetings. The political pressure and growing expectations of policy divergence triggered a steep decline in the greenback, pushing the US Dollar Index (DXY) down toward the 97.00 mark—its lowest level in over three years. Equity markets responded positively, with major US indexes closing near record highs. The S&P 500 advanced 0.8% to end the session at 6,141.02, just shy of its all-time high of 6,144.15 set in February. The Nasdaq Composite climbed over 1%, also finishing within striking distance of a record, while the Dow Jones Industrial Average gained around 400 points, or 0.9%. Nvidia (NVDA) rose another 1%, extending its record-breaking rally from the previous day. Markets increasingly interpret Trump’s criticism of Powell as a sign that early interest rate cuts are becoming more likely. These expectations have been further reinforced by continued signs of weakness in the US labour market, which many see as increasing pressure on the Fed to act sooner rather than later.