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Trump lambasts Fed ahead of Powell’s testimony

To cut or not to cut - that is the question Fed Chair Jerome Powell may try to answer in Congress this week.

Centtrip: US services sector data compounds recession fears

The Dollar is stronger after the US posted better-than-expected jobs growth in June, having wiped out chances of a 50-basis-point interest rate cut by the Federal Reserve later this month.

The US non-farm payroll number rebounded in June to 224,000, the highest in five months. However, modest wage gains and other data showing the world’s largest economy is losing steam could still support the case for a rate cut by 25 basis points.

Traders will now focus Fed Chair Jerome Powell’s testimony in Congress on 10 and 11 July.

Meanwhile, Donald Trump lambasted the Fed again last Friday, 5 July, tweeting the most “difficult problem” facing the US economy “is not our competitors, it is the Federal Reserve!” Earlier that day, the US president insisted that if interest rates were cut, the US “would be like a rocket ship”.

The Euro came under pressure on Friday after the latest data from Germany showed industrial orders fell far more than expected in May and the Economy Ministry warned that this sector of Europe’s largest economy was likely to remain weak in the coming months.

The Pound hit a six-month low against the Dollar after poor economic data and a rise in expectations that the Bank of England (BoE) will cut interest rates. Positive US jobs data sparked a Dollar rally, adding to Sterling’s losses, which plunged to as low as $1.2481, its lowest since the “flash crash” on 3 January when it dropped to $1.2409.

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