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GLOBAL MARKETS-Trump's Fed attack sees dollar dive and stocks struggle

Published 21/08/2018, 06:48 pm
© Reuters.  GLOBAL MARKETS-Trump's Fed attack sees dollar dive and stocks struggle
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* Dollar falls for fourth day, worst run since March

* European stocks lower with FTSE underperforming

* Dollar weakness boosts EM FX and commodities

* Graphic: World FX rates in 2017 http://tmsnrt.rs/2egbfVh

* For a live blog on European stocks, type LIVE/ in an Eikon news window

By Alasdair Pal

LONDON, Aug 21 (Reuters) - Critical comments by U.S. President Donald Trump about the country's central bank held back some stocks on Tuesday, while the dollar fell for the fourth consecutive day in its worst spell since March.

In an exclusive interview with Reuters, Trump said late on Monday he was "not thrilled" with the Federal Reserve under his own appointee, Chairman Jerome Powell, for raising interest rates and said the Fed should do more to help him to boost the economy. presidents have rarely criticized the Fed in recent decades because its independence has been seen as important for economic stability.

"The Fed is independent in setting monetary policy and markets were spooked by yet another comment from Donald Trump criticising higher interest rates," said Artjom Hatsaturjants, an analyst at Accendo Markets.

The dollar index .DXY , which tracks performance against a basket of six major currencies, fell 0.35 percent on Tuesday.

It has now fallen 1.2 percent in the last four days, its worst such run since late March.

The pan-European Stoxx 600 .STOXX index rose 0.2 percent in early trade on Tuesday, with export-led UK stocks underperforming.

The FTSE 100 .FTSE , which derives a large portion of its revenues in the United States and so benefits from dollar strength, was flat.

EMERGING RELIEF

The dollar's weakness took the pressure off many emerging market currencies, that have struggled in recent weeks as worries over Turkey precipitated a sell-off across the globe.

The Chinese yuan rose by 0.25 percent to 6.839 per dollar. The currency was on track for its fourth session of gains, pulling further away from 6.934, its weakest since January 2017 marked last week.

The yuan had weakened to a 19-month low against the dollar earlier this month amid concerns over the country's economic growth, Sino-U.S. trade war worries and a broad rally by the dollar.

In his Reuters interview, Trump also accused China of manipulating its currency and said there was little hope of progress in the ongoing trade dispute between the two countries in talks due this week. emerging currencies, including the South African rand ZAR= , Thai baht THB= , Mexican peso MXN= , Hungarian forint HUF= , Polish zloty PLN= and Indian rupee INR= , were all higher by 0.2 to 0.8 percent against the dollar.

Commodities that are priced in dollars and so benefit from any weakness were also higher across the board.

Base metals prices rose, with London copper CMCU3 climbing for a second day and crossing the $6,000-a-tonne mark, while spot gold XAU= rose 0.28 percent to $1,193. crude oil LCOc1 rose 0.12 percent to $72.35 per barrel.

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