US dollar slid, while its stock markets rose Thursday as president Donald Trump lined up candidates to succeed Federal Reserve boss Jerome Powell, fuelling bets of cuts to US interest rates.
Wall Street opened in the green after Trump suggested he was lining up Powell鈥檚 replacement ahead of an expected departure next year.
The Dollar Index, which compares the greenback to a basket of major currencies, hit its lowest level since March 2022 at 96,997 points.
The pound meanwhile reached its highest level against the greenback since October 2021.
鈥楥oncerns over the Federal Reserve鈥檚 independence and growing expectations for monetary easing weighed on the currency,鈥� said George Pavel, general manager at Naga.com Middle East, a trading platform.
鈥楾he move, if confirmed, would raise serious questions about the central bank鈥檚 autonomy at a time of heightened policy uncertainty, painting a bearish scenario for the greenback,鈥� Pavel said.
Since returning to the White House, Trump has constantly hit out at Powell for not cutting US interest rates and questioned his intelligence, stoking worries about the bank鈥檚 independence.
鈥業 know within three or four people who I鈥檓 going to pick,鈥� Trump told reporters after a NATO summit.
The Wall Street Journal reported that Trump could announce a replacement as early as September, with Treasury Secretary Scott Bessent, economic adviser Kevin Hassett and former Fed governor Kevin Warsh among the contenders.
Earlier this week, Powell told lawmakers the bank would assess the impact of Trump鈥檚 tariffs on the economy before making any rate move.
European and Asian stock markets diverged and oil prices were a lot steadier as Middle East tensions eased and focus turned back to US trade negotiations.
Shares in European defence companies rose after NATO countries on Wednesday agreed to ramp up military spending.
Rheinmetall jumped five per cent in Frankfurt while France鈥檚 Thales gained 2.8 per cent and Britain鈥檚 BAE systems added more than three per cent in afternoon deals.
Asia鈥檚 main stock market closed mixed.
鈥楨asing tensions in the Middle East, the potential for rate cuts coming later this year, and stabilising oil prices are helping support a relatively positive outlook for equities,鈥� noted Matt聽Britzman, senior equity analyst at Hargreaves Lansdown.
Trade uncertainty resurfaced as most countries have yet to reach deals with Washington to avoid steep tariffs ahead of a July 9 deadline.
The shaky ceasefire between Iran and Israel still held Thursday and Trump said that he would hold nuclear talks with Tehran next week.
Oil prices extended a mild rebound after tumbling at the start of the week on the ceasefire announcement.