U.S. dollar down on as Trump makes fresh threats vs China

U.S. President Donald Trump on Thursday told CNBC that he was unhappy about the Federal Reserve's decision to hike interest rates, saying he was concerned about their potential impact on the U.S. economy and American competitiveness. By maintaining its independence, the central bank can make politically contentious decisions to combat economic challenges, like the huge bond purchases it made after the 2008 financial crisis to help drive down long-term rates to support the economy.

'Because we go up and every time you go up they want to raise rates again. I don't really - I am not happy about it. "But at the same time I'm letting them do what they feel is best", he added.

The CNBC interview will air in its entirety Friday but the network released excerpts Thursday. The benchmark 10-year note, which touched a one-month high yield of 2.90% early this morning, had dropped to 2.855% around noon EDT and fell further to 2.84% in early afternoon trading. "I don't like all of this work that we're putting into the economy and then I see rates going up", he said.

Trump also acknowledged that his comments on the Fed were unorthodox but stated that he would think the same thing as a private citizen and that he didn't care if people criticized him for that.

Indeed, he has never been reticent on the subject.

Most economists believe the current economic climate, with the nation's unemployment at historic lows and inflation at the Fed's 2 percent target, justify recent interest rate rises and a strong USA dollar.

Bloomberg's headline says Trump "trespass [ed] on Fed's independence".

It wasn't the first time in history the Fed has faced pressure from a USA president.

There's a risk the dollar "de-couples from interest-rate differentials as investors come to terms with the White House's mercantilist US -dollar policy", Patel.

Doing so slows growth, as it raises the cost of borrowing, but can also prevent the economy from overheating and tipping into recession.

Most Fed policymakers see the USA job market as close to full strength, while inflation has recently risen to the Fed's 2 percent target. And at others, the central bank was complicit in hewing to the administration's political preferences.

Trump said higher interest rates left the United States at a disadvantage when compared to the European Union and Japan, where easy money policies persist. During the 1972 election year, Burns ran an extremely expansionary policy to ensure a strong economy to benefit Nixon's campaign, while talking tough about inflation.