- The USD/JPY pair is trading lower, around 147.20, in the early Asian sessions on Thursday.
- Concerns over Trump’s attempts to influence the Federal Reserve are impacting the US dollar.
- Comments from Ueda suggest conditions are ripe for another interest rate hike.
The USD/JPY currency pair is dipping to about 147.20 during the early trading hours in Asia on Thursday. The US dollar is struggling against the Japanese Yen, driven by ongoing worries regarding the Federal Reserve’s independence. Traders are also focused on the upcoming revision of the US GDP growth rate for the second quarter, along with weekly reports on unemployment claims and pending home sales.
The dollar remains under pressure, particularly after President Trump’s attempt to dismiss Federal Governor Lisa Cook earlier in the week. Trump has expressed his intentions to appoint candidates who align with his views on interest rates. In response, Cook emphasized that Trump has no authority to remove her and that she plans to stay in her position.
Trump’s efforts to influence Cook are viewed as attempts to gain control over the Fed, which raises questions about the independence of the central bank. Currently, market tools like CME’s FedWatch indicate an 87.2% probability of a 25 basis point rate cut in September.
Later on Thursday, attention will shift to the second estimate of the US GDP for Q2, with expectations of an annual growth rate of 3.1%. If the figures exceed forecasts, it might boost the dollar temporarily.
On the other hand, recent remarks from Bank of Japan Governor Kazuou Ueda are lending some support to the Yen. He noted that wage growth is spreading beyond large corporations, suggesting that it may accelerate as the job market tightens. This has sparked optimism for potential interest rate increases in the near future.
