investingLive Asia-Pacific FX news wrap: Trump attacks Fed, Powell attacks back

The USD endured its sharpest setback in nearly three weeks due to concerns over Federal Reserve independence after Chairman Powell disclosed the issuance of grand jury subpoenas from the Justice Department. This disclosure reignited fears regarding the potential political interference in monetary policy from the Trump administration, causing significant market jitters. The Bloomberg Dollar Spot Index fell by about 0.2%, while US equity index futures declined as investors retreated. The dollar weakened broadly against G10 currencies, although it managed to recover some ground against a notably weak yen, while gold and silver surged as investors sought safe havens. Political fallout escalated as Republican Senator Thom Tillis stated he would block the confirmation of any Fed nominee until the investigation into Powell was resolved, highlighting rising leadership uncertainty. In commodities, oil prices extended gains amid concerns that protests in Iran might disrupt significant exports, with Trump issuing warnings about potential responses to Iranian actions, adding to geopolitical risks. Investors need to reevaluate their strategies in this volatile environment, focusing on positioning in USD, gold, and oil.