The dollar index rose by +0.30% on Friday, as President Trump’s comment about not needing to fire Fed Chair Powell eased concerns about Fed independence. However, US Jun capital goods new orders declined unexpectedly, and the S&P 500’s rally to a new high curbed liquidity demand for the dollar.

President Trump stated there was “no tension” with Fed Chair Powell and expressed a desire to see interest rates lowered, acknowledging their differing views.

Federal funds futures prices suggest a 3% chance of a -25 bp rate cut at the July FOMC meeting and 64% at the September meeting.

EUR/USD fell by -0.04% on Friday due to a stronger dollar, but Eurozone economic news supported the euro, with the June M3 money supply rising less than expected and German IFO business confidence reaching a 14-month high.

The German Jul IFO business confidence index rose to a 14-month high of 88.6, slightly below expectations of 89.0.

ECB Governing Council member Kazaks and Bundesbank President Nagel supported a steady monetary policy, with Kazaks seeing little reason to lower rates further.

Swaps indicate an 18% chance of a -25 bp rate cut by the ECB at the September 11 policy meeting.

USD/JPY rose by +0.38% on Friday due to Japan’s weak economic data, leading to concerns about BOJ policy and fiscal deterioration.

Japan’s Jul Tokyo CPI rose +2.9% y/y, slightly weaker than expected, while Jun PPI services prices rose in line with expectations.

Precious metals prices fell on Friday as a stronger dollar and comments from President Trump reduced safe-haven demand, while hawkish ECB comments weighed on metals.

Precious metals continue to receive support from geopolitical risks, with fund buying pushing gold and silver prices up.

Read more at Yahoo Finance: Dollar Moves Higher as President Trump Eases Criticism of Fed Chair Powell