Trump sends dollar tumbling after taking swipe at central bank and rubbishing upcoming China trade talks

Dollar falls against euro and pound after president criticises interest rates hike

The dollar has dropped against the pound and the euro, after Donald Trump took aim at the Federal Reserve for raising interest rates.

The greenback was down 0.33 per cent against sterling – with £1 buying more than $1.28 in early Tuesday trading – and fell 0.36 per cent against the euro.

Mr Trump said that he was “not thrilled” with the US central bank, even under the direction of his own appointment, Jerome Powell, who took over from Janet Yellen earlier this year.

“I’m not thrilled with his raising of interest rates, no. I’m not thrilled,” Mr Trump said.

The reserve has raised rates seven times since 2015, most recently hiking the rate to between 1.75 and 2 per cent in June, citing continued strengthening in the labour market and economic activity. The central bank is expected to announce another rise next month.

The president said other countries benefited from their central banks’ actions during tough trade talks, but said the reserve was not being supportive.

“We’re negotiating very powerfully and strongly with other nations. We’re going to win. But during this period of time I should be given some help by the Fed. The other countries are accommodated,” he said.

The US and China meet for trade talks in Washington this week, but Mr Trump has said he does not “anticipate much” from the discussions. The two economies have been at loggerheads in recent months, locked in a back-and-forth ramping up of tariffs, which has at times threatened to escalate into a global trade war.

Mr Trump also accused China and the eurozone of manipulating their currencies to compensate for tariffs imposed by his administration.

“I think China’s manipulating their currency, absolutely. And I think the euro is being manipulated also,” Trump said.

“What they’re doing is making up for the fact that they’re now paying ... hundreds of millions of dollars and in some cases billions of dollars into the United States Treasury. And so they’re being accommodated and I’m not. And I’ll still win.”

A reserve spokesperson declined to comment on Mr Trump’s comments.