A note from MUFG on Trump's war on the US Federal Reserve:
- The relatively limited dollar decline so far partly reflects doubts over whether Trump’s move to fire Fed Governor Cook will hold up legally.
- Even so, the action represents a clear escalation in Trump’s assault on the Fed’s independence.
- This raises the risk that the U.S. dollar could face a larger selloff down the line.
- Adding to the case for further dollar weakness are Powell’s remarks on Friday, which signalled the Fed is edging closer to cutting rates again.
