U.S. Dollar Slides As Donald Trump Proposes Appointing New Fed Chair Early

(RTTNews) - The U.S. dollar weakened against other major currencies in the Asian session on Thursday, as financial markets reacted apprehensively to mounting worries about the future independence of the U.S. Federal Reserve. The drop came as news broke that President Donald Trump is thinking of replacing Fed Chair Jerome Powell before the November elections.

Reports showed that Trump was considering naming Powell's replacement by September or October.

On Wednesday, U.S. President Donald Trump stepped up his attacks on Federal Reserve Chair Jerome Powell, labeling him "terrible" and announcing that he had whittled down a list of possible successors to the top Fed position.

Markets consider that if this move was seen as having political motivations, it may compromise the independence of the Federal Reserve and make its cautious interest rate control strategy more difficult.

Meanwhile, traders remain concerned about the fragile ceasefire in the Middle East that appears to hold, and shift focus to the looming U.S. tariff pause deadline on July 9. They also turn their focus to the U.S. Fed's plans on interest rates.

In the Asian trading today, the U.S. dollar depreciated to more than a 10-year low of 0.8024 against the Swiss franc, nearly a 4-year low of 1.1717 against the euro and a 3-1/2-year low of 1.3725 against the pound, from yesterday's closing quotes of 0.8038, 1.1684 and 1.3689, respectively. If the greenback extends its downtrend, it is likely to find support around 0.78 against the franc, 1.18 against the euro and 1.38 against the pound.

The greenback dropped to a 2-day low of 144.57 against the yen, from Wednesday's closing value of 144.92. On the downside, 142.00 is seen as the next support level for the greenback.

Against the Australia and the New Zealand dollars, the greenback dropped to an 8-day low of 0.6536 and a 9-day low of 0.6066 from yesterday's closing quotes of 0.6521 and 0.6054, respectively. The greenback may test support near 0.66 against the aussie and 0.61 against the kiwi.

Moving away from a recent high of 1.3723 against the Canadian dollar, the greenback slipped to a 2-day low of 1.3701. The next support level for the greenback is seen around the 1.35 region.

Looking ahead, European Central Bank's General Council meeting is due to be released at 3:00 am ET.

In the New York session, Canada average weekly earnings for April, Canada wholesale sales data for May, U.S. durable goods orders for May, U.S. GDP data for the first quarter, U.S. Chicago Fed National Activity index for May, U.S. goods trade balance for May, wholesale inventories for May, U.S. weekly jobless claims data and U.S. PCE prices for the first quarter are slated for release.