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The dollar fell to a one-month low against a basket of currencies on Friday after U.S. President Donald Trump called for lower interest rates and signaled a possible softer stance on China tariffs.
The U.S. dollar index fell 0.7% to its lowest level since mid-December after Trump said he understood interest rates “better” than the Fed and wanted to see them fall “significantly.”
The euro, which has fallen sharply in recent months, rose 0.8% to $1.05, and the pound rose 0.7% to $1.243.
Trump also said he would “rather not” impose tariffs on China. Investors sold off the U.S. dollar this week as Trump’s widely anticipated tariff announcement did not materialize immediately.
Fund managers say the Fed’s resilience in dealing with pressure from a new president is a core theme this year.
“The pressure on the Fed will be enormous,” said Olivier De Larouzière, chief investment officer of global fixed income at BNP Paribas Asset Management.
He added that there are “good reasons” for investors to start considering a rate hike in 2026 in the coming quarters, so the market will be “paying close attention” to communications from the Fed in the coming months to see whether Trump’s comments will stop.
