USD weakens as Trump attacks Fed Chair Powell over housing market rates

The US dollar has come under pressure following former President Trump's harsh criticism of Federal Reserve Chair Jerome Powell, calling him 'too late' and one of his 'worst appointments.' Trump accused Powell and the Fed of 'choking out' the housing market with high interest rates, making homeownership difficult for young buyers. The political pressure adds uncertainty to the Fed's policy outlook, with markets already pricing in potential rate cuts later in 2025. The dollar index (DXY) has retreated 0.2% from daily highs as traders reassess Fed policy expectations amid mounting political rhetoric. With housing affordability becoming a key political issue, increased pressure on the Fed to ease monetary policy could weaken the dollar's yield advantage. Near-term support for DXY sits at 104.50, while resistance remains at 105.20. Traders should monitor upcoming Fed communications for any shift in tone regarding the pace of potential rate adjustments.