In another sign that the market is becoming increasingly unpredictable, the dollar, pound and euro ended yesterday almost exactly where they started the day. This was despite US President Donald Trump making the unprecedented move of trying to fire one of the independent governors of the Federal Reserve central bank.
Earlier in his administration simply threatening to fire Fed chair Jerome Powell sent the dollar crashing, but even though he claims to have fired Governor Lisa Cook, the markets shrugged off the news and the dollar remained level with the pound and euro.
This may all sound a little insider baseball, but it highlights the challenge of trying to anticipate what currency exchange rates will do from week to week or month to month.
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There is not only the potential for disruption over in the US, but there are also seeds of change much closer to home.
French Prime Minister François Bayrou has called a confidence vote in his minority government’s budget plans. If the vote goes against him on September 8 and he resigned, it will mean the fifth new Prime Minister since 2024.
Disruptive changes like administration change could easily unsettle the euro, but, as proven by Trump’s attack on Lisa Cook, there’s no saying how disruption will play out in the exchange rates.
