In June, the dollar fell to its lowest level since September 2021, at $1.17 per euro. The greenback's weakness stems from Donald Trump's attacks on Jerome Powell, the Chairman of the Federal Reserve.
A proponent of a cautious monetary approach, the latter is reviled by the American president, who wants a rapid cut in interest rates to stimulate economic activity and more cheaply finance the runaway public finances.
Unable to replace Jerome Powell, whom he ironically appointed in 2017, before the end of his term in May 2026, Donald Trump has been trying in recent weeks to undermine his authority. To achieve this, Trump could appoint a successor who, like himself, supports monetary easing well in advance.
Internal conflicts undermine the Fed
The US President's manoeuvres are already creating tensions within the Central Bank, with some members of the monetary committee now openly advocating for lower interest rates to appease Trump and thus be considered for the next Fed Chairman.
The animosity between political and monetary powers is creating instability that is detrimental to the value of the greenback. Investors are also anticipating a further decline in the key interest rate, which would make the dollar less attractive.
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