USD firms as Trump pressures Fed to cut rates, threatens trade curbs

The US dollar index held firm after President Trump publicly demanded the Federal Reserve lower interest rates, tying his call to the August employment report that showed 162,000 jobs added, beating consensus estimates. Trump escalated the rhetoric by threatening to halt trade with countries running trade surpluses against the United States, injecting a fresh geopolitical premium into currency markets. The combination of a firmer labour market and political interference in monetary policy leaves USD pairs conflicted: stronger payrolls argue against near-term Fed easing and support the greenback, while overt White House pressure on the central bank raises questions over Fed independence and the long-term dollar risk premium. EUR/USD and GBP/USD saw two-way flow, while USD/JPY remained pinned near the closely watched 155.00 area. Traders should monitor Fed speakers for pushback on political pressure, as any signal of accommodation would be dollar-negative. Trade-sensitive currencies such as EUR, JPY, CAD and MXN carry additional headline risk if tariff threats are formalised into policy.