Dollar Slides as Trump Mulls Early Fed Pick; Rate Cut Bets Rise – Asia Market Wrap

The dollar declined and Treasury yields edged lower on bets that US rate cuts could come sooner than expected, after a report that President Donald Trump is considering an early appointment for the next Federal Reserve chairman.

The DXY dropped as much as 0.4% to hit its lowest level since April 2022. Its big losses were against the Japanese yen and Taiwan’s currency. Treasury yields declined at every major maturity, with 10-year yields down two basis points to 4.27%.

The moves came after a Wall Street Journal report that Trump may announce Fed’s Powell’s replacement by September or October, an unusually early appointment that may effectively create a shadow Fed chair with the power to influence market sentiment. That has bolstered expectations that US interest rates will be cut sooner than previously expected.

A broad gauge of regional equities was up around 0.5%, while US equity futures were slightly higher. Tech stocks got a boost from the overnight rally in Nvidia, which pushed the giant chipmaker’s shares to an all-time high.

Oil gained for a second day as investors grappled with an uneasy ceasefire in the Middle East. Despite stabilizing prices, the market remains on edge. Russia said it was open to another output hike at the next OPEC+ meeting.