Trump’s Fed Attacks, Data Concerns Cloud Dollar Outlook

Foreign exchange analysts predict the U.S. dollar will decline in upcoming months because they assess multiple risks including Federal Reserve independence threats and official data credibility issues and rising debt levels and potential interest rate reductions.

The greenback has dropped by almost 9% throughout this year after experiencing a short-term increase from the U.S.-EU tariff agreement. The U.S. Bureau of Labor Statistics chief faced dismissal from President Donald Trump after he made baseless accusations about data manipulation which led to additional market declines.

The surveyed strategists during August 1–5 predicted the euro will climb to $1.17 by October and reach $1.20 during the following year which represents the highest projection since 2021. Wells Fargo's Erik Nelson stated that U.S. "exceptionalism" is disappearing because of fundamental problems with policy stability and data integrity.

The unpredictable trade actions of Trump combined with his ongoing criticism of Powell have increased the term premium for U.S. debt which reduces the appeal of long-term securities.

A survey of policy experts revealed that 89% of participants doubted the accuracy of U.S. economic statistics before Trump dismissed BLS Commissioner Erika McEntarfer. The political interference in U.S. markets threatens to damage investor confidence in these markets further.