Yesterday, the dollar fell in response to news that U.S. President Donald Trump had appointed Council of Economic Advisers Chair Steven Miran as a member of the Federal Reserve Board of Governors. “He has been with me since the start of my second term, and his experience in the world of economics is unmatched. I am confident he will do an outstanding job,” Trump said.
The president noted that Miran, whose candidacy must be confirmed by the U.S. Senate, will serve only until the end of Fed Governor Adriana Kugler’s term, which expires in January.
The decision, seen by markets as unexpected and unorthodox, triggered a wave of concern about the future independence and stability of U.S. monetary policy. Investor reaction was driven by several factors. First, while Miran is a respected economist, he has no experience working at a central bank, raising questions about his ability to manage the complex processes of monetary regulation effectively. Second, appointing someone closely linked to the president’s administration calls into question the Fed’s independence, which has traditionally been a cornerstone of the U.S. financial system. Increased political influence over the Fed could lead to unpredictable consequences, such as artificially lowering interest rates to stimulate the economy in the short term at the expense of long-term stability. Investors fear this could undermine confidence in the dollar and trigger capital outflows.
Miran, who holds a PhD in economics from Harvard University, recently supported Trump’s call for interest rate cuts. He is known for presenting his views more measuredly than many of Trump’s other advisers. Nevertheless, he has sharply criticized the Fed and proposed changes to the central bank’s operations that some might consider unconventional.
Some economists and analysts said Miran was an unexpected choice but one that fits current market needs. “Miran will be another voice in favor of a potentially more accommodative Fed policy. This strengthens confidence that the Fed will cut rates more aggressively before year-end, as it’s unlikely the Fed will maintain current rates with three dissenting votes on the Board of Governors. We have officially entered an easing cycle for the markets,” Integrity Asset Management said.
Other commentators were more skeptical about Miran’s potential influence. “Overall, he is just one member of the entire committee, and he is not going to introduce structural changes or push for a more substantial rate cut,” said analysts at the Mercatus Center at George Mason University.
The U.S. Senate is currently on its annual August recess and is not scheduled to return to Washington until early September. While Miran recently passed a confirmation process for his current position, his new appointment could still take several weeks to approve, even if Republican leaders prioritize the nomination.
EUR/USD technical picture – Buyers now need to secure the 1.1690 level. Only then will they be able to target a test of 1.1730. From there, the path opens toward 1.1760, though doing so without support from major players will be challenging. The ultimate target remains the 1.1800 high. In the event of a decline, significant buying activity is expected only near 1.1655. If no buyers appear there, it would be preferable to wait for a retest of the 1.1610 low or consider long positions from 1.1565.
GBP/USD technical picture – Pound buyers need to break the nearest resistance at 1.3450. Only this will allow them to aim for 1.3475, above which it will be difficult to advance. The final upward target would be the 1.3502 level. If the pair falls, sellers will try to retake control at 1.3405. If they succeed, a breakout of the range will deal a serious blow to the bulls’ positions and push GBP/USD toward the 1.3375 low, with potential to reach 1.3350.
