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Trump’s comments regarding his preference for a weaker USD and disapproval of higher interest rates has re-introduced the debate of Fed independence, according to analysts at TD Securities.

Key Quotes

“This is more noise than direction as he alone will likely yield little to no influence over Fed decision-making. At this juncture, few alternatives exist at this time to check USD firmness.”

“This is likely to be aided by a higher trajectory for USDCNY. Our year-end target was achieved much sooner than expected. Despite the swift ascent, we look for additional topside and eye 7.10 by year-end. The spillover effect is likely to permeate through selective EM and G10 FX markets, keeping the USD a stable but firm for the time being until a macro catalyst suggests otherwise.”