Dollar Hits Over 2-Year Low as Trump Eyes Early Fed Shake-Up; Stocks Rise on Rate Cut Bets – Europe Market Wrap

The dollar fell as traders ramped up bets for faster US interest-rate cuts, spurred by a report that President Donald Trump may fast-track his nomination for the next Federal Reserve chief. Stock futures advanced.

The DXY dropped 0.5% to the lowest level since April 2022. The dollar has tumbled more than 8% this year, as traders responded to on-again, off-again tariffs and raised broader questions about the role of the greenback in global trade. Treasury yields fell across the curve, with the 10- year rate down two basis points to 4.27%. Markets are pricing 63 basis points of easing from the Fed by the end of the year, compared to 51 basis points at the end of last week.

The moves followed a Wall Street Journal report that Trump may announce Jerome Powell’s replacement as soon as September, an unusually early appointment that may effectively create a shadow central bank chair with the power to influence sentiment. That has reinforced expectations of a more dovish-leaning Fed, after Trump repeatedly criticized Powell for holding rates steady.

The S&P 500 is poised to resume its advance toward an all-time high. Futures for the US benchmark gained 0.4% as technology stocks rose in premarket trading, with strong earnings from Micron Technology showing robust demand for chips powering artificial intelligence workloads.