Investing.com - The U.S. dollar was broadly lower against a basket of the other major currencies on Tuesday after President Donald Trump said he disagreed with the Federal Reserve's decision to raise interest rates.
The dollar was also softer ahead of expected trade talks between Chinese and U.S. officials in Washington in the coming days that investors hope will ease tensions between the world’s two largest economies.
The U.S. dollar index, which measures the greenback’s strength against a basket of six major currencies, was down 0.2% to 95.5 by 03:53 AM ET (07:53 AM GMT) after touching an overnight low of 95.31, the weakest level since August 9.
The dollar weakened after Trump said in an interview with Reuters on Monday that he was "not thrilled" with Fed Chairman Jerome Powell for raising rates and added that the Fed should do more to help him to boost the economy.
Trump nominated Powell to succeed former Fed Chair Janet Yellen earlier this year.
The president said he would criticize the Fed if it continues to raise rates. The Fed has been hiking rates and is expected to continue doing so, with another two increases expected this year.
Trump also accused China and Europe of manipulating their respective currencies and said he did not expect much progress from this week’s trade talks with Chinese officials.
The comments come ahead of Wednesday’s minutes of the Fed’s August meeting, with investors on the lookout for any tweaks to the Fed’s outlook on inflation, the economy and trade war fears.
On Friday, Jerome Powell is to make his first appearance as Fed chairman at the annual economic symposium in Jackson Hole.
The dollar was flat against the safe haven yen, with USD/JPY at 110.08, after touching a two-month low of 109.78 overnight.
The euro pushed higher, with EUR/USD last at 1.1513 after rising as high as 1.1541 overnight.
The single currency plumbed 13-month lows against the dollar last week amid fears over contagion effects on European banks from Turkey’s currency crisis.
The Turkish lira was lower in thin trade, with Turkish financial markets closed for holidays for the week. The lira came under renewed selling pressure after Trump said there will be "no concessions" in a standoff with Turkey over a detained U.S. pastor.
Meanwhile, the pound gained ground, with GBP/USD rising 0.26% to 1.2828.