The dollar rose and European shares fell on Wednesday as traders scaled back expectations of an aggressive cut in U.S. interest rates in July, while Wall Street rose on hopes of a China-U.S. trade breakthrough at the G20 summit later this week in Japan.
Gold fell 1% after Federal Reserve Chairman Jerome Powell said on Tuesday the U.S. central bank is “insulated from short-term political pressures,” suggesting policymakers would not bow to pressure from President Donald Trump to sharply cut rates.
Trump said Powell was doing a “bad job” and he called on the central bank to lower rates so the United States can compete with countries that he said are devaluing their currencies.
A pullback in the Japanese yen and Swiss franc was limited as traders remain jittery about a resolution to the U.S.-China trade spat. Some bids for both safe-haven currencies persisted amid tensions between Iran and the United States.
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