The dollar just posted its fourth straight daily decline with upbeat trade headlines failing to reverse momentum despite a solid 20-year Treasury auction. Yields at the long end remain elevated, likely reflecting continued pressure from the White House. President Trump and Treasury Secretary Bessant have kept up calls for rate cuts, while Commerce Secretary Lutnik confirmed that tariff rates on key trade partners will stay high.
Treasury Secretary Bessant also questioned the Fed’s interpretation of inflation and trade data, stopping just short of criticizing Chair Powell directly. A White House visit to the Fed next week is now flagged as a potential market moving event.
In housing, MBA mortgage applications rose 0.8%, but existing home sales slipped 2.7% as median prices hit a record high. President Trump blamed the Fed for lagging affordability, though the link between rate cuts and lower home prices remains debatable. Meanwhile, questions are quietly surfacing around the Fed’s independence, especially given President Trump’s influence over both monetary policy and his substantial crypto holdings.
Moving on, the euro extended its winning streak, hitting fresh highs on optimism over a potential US–EU tariff deal. Reports suggest the EU may drop tariffs on aircraft, spirits, and medical devices, lifting European equities and driving G10 currencies higher across the board. German and French officials signaled a resolution is near, further improving risk sentiment.
Elsewhere, the US approved military sales to Ukraine and confirmed that $550 billion from the Japan trade deal would be spent at Trump’s discretion, a detail likely to draw media scrutiny.
Overall, the dollar’s recent downtrend appears to have reasserted itself with price action now skewed clearly to the downside.
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