Is the U.S. Dollar’s Strength Fading?

In a July tweet, Trump took aim at China and the European Union for alleged currency and interest rate manipulation, claiming such actions unfairly boost the dollar and reduce the U.S.’s “competitive edge” in international trade.

In a follow-up tweet, Trump indirectly attacked the Fed for raising interest rates, a move he claims “hurts all that we have done.” Since then, Trump has made further comments criticizing recent rate hikes and even Fed Chairman Jerome Powell himself.

Although the US is well underway on its rate tightening cycle and balance sheet unwinding, there are signs other major central banks may soon follow suit.

Earlier this month, the Bank of England raised interest rates to 0.75%, which was their second hike since the 2008 financial crisis. In a similar move, the European Central Bank announced in June that they would likely halt new bond purchases at the end of 2018.

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