- Trump says strong dollar puts U.S. at a disadvantage
- Dollar falls vs yen, cuts gain vs yuan
- Graphic: World FX rates in 2018 http://tmsnrt.rs/2egbfVh
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The dollar fell from a one-year peak to trade just slightly higher on Thursday after U.S. President Donald Trump expressed concern about a strong currency and the Federal Reserve's interest rate increases.
The greenback also gave back some of its gains against the Chinese yuan, which had earlier dropped to a one-year low against the dollar.
In an interview with CNBC, Trump said a strong dollar "puts us at a disadvantage," adding that the Chinese yuan "has been dropping like a rock."
A strong currency tends to make a country's exports more expensive.
Trump was also unhappy about the Fed's monetary tightening, noting he was concerned about its potential impact on the U.S. economy and American competitiveness.
The White House later did damage control after the Trump bomb, saying the president respects the Fed's independence and is not interfering with its policy decisions.
Analysts said Trump's comments could mean a turning point for the dollar's upward trend this year.
The prospect of higher U.S. interest rates has propelled the U.S. dollar this year. Since hitting a more than three-year low against a basket of six major currencies in February, the dollar .DXY has gained 8.4 percent.
"We suspect the President's comments on U.S. interest rates and currency markets will almost likely put an end to the dollar rally – and in the absence of any immediate escalation of the global trade war, it's a mini-lifeline for emerging market and high-beta (risky) currencies elsewhere," said Viraj Patel, FX strategist, at ING in London.
"We had always been wary of the administration's desire for a weaker dollar and that an implicit 'weak dollar policy' in itself could become self-fulfilling."
This is not the first time that Trump voiced his displeasure with a strong dollar. He told the Wall Street Journal on three separate occasions last year that the dollar was "too strong."
Omer Esiner, chief market analyst at Commonwealth Foreign Exchange, said Trump's comments on interest rates and the Fed are significant because they have crossed a historic line that previous presidents have not.
Following Trump's remarks on Thursday, the dollar index briefly turned negative, but later recovered to trade 0.1 percent higher at 95.216. The index earlier touched a one-year high of 95.652.
The dollar fell to a one-week low vs the yen, last trading down 0.3 percent at 112.47 yen JPY= .
The euro, meanwhile, was slightly lower at $1.1635 EUR= . The dollar also cut gains against the yuan in late trading, and was last up 0.6 percent at 6.789 yuan.
So far this year, the yuan has weakened more than 4.0 percent versus the U.S. dollar.
======================================================== Currency bid prices at 3:45PM (1945 GMT)Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid Previous Change Session Euro/Dollar EUR= $1.1637 $1.1638 -0.01% -2.98% +1.1678 +1.1575 Dollar/Yen JPY= 112.4700 112.8300 -0.32% -0.18% +113.1600 +112.0900 Euro/Yen EURJPY= 130.90 131.32 -0.32% -3.17% +131.4200 +130.7400 Dollar/Swiss CHF= 0.9991 0.9987 +0.04% +2.52% +1.0043 +0.9960 Sterling/Dollar GBP= 1.3008 1.3068 -0.46% -3.73% +1.3083 +1.2959 Dollar/Canadian CAD= 1.3258 1.3169 +0.68% +5.41% +1.3289 +1.3160 Australian/Doll AUD= 0.7352 0.7397 -0.61% -5.76% +0.7441 +0.7324 arEuro/Swiss EURCHF= 1.1627 1.1625 +0.02% -0.53% +1.1640 +1.1614 Euro/Sterling EURGBP= 0.8945 0.8903 +0.47% +0.70% +0.8955 +0.8902 NZ NZD= 0.6740 0.6792 -0.77% -4.88% +0.6805 +0.6714 Dollar/DollarDollar/Norway NOK= 8.2306 8.1688 +0.76% +0.29% +8.2743 +8.1629 Euro/Norway EURNOK= 9.5802 9.5075 +0.76% -2.73% +9.5905 +9.5073 Dollar/Sweden SEK= 8.9146 8.8648 +0.56% +8.69% +8.9549 +8.8513 Euro/Sweden EURSEK= 10.3759 10.3180 +0.56% +5.46% +10.3820 +10.3138 <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ GRAPHIC-CNY Performance http//reut.rs/2L5WbJX^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
