FX168 Financial News (Hong Kong)-US President Donald Trump has stepped up his criticism of global monetary policy and the Federal Reserve. He said on Twitter on Friday that a number of countries are manipulating their exchange rates to the detriment of the United States. In addition, he once again attacked the Fed and the strong dollar, saying that policy tightening has now hurt everything we have done. Trump's remarks on interest rates and the Federal Reserve have been accused of crossing the bottom line that US presidents have never touched and setting a precedent in history. After Trump's comments, the dollar fell sharply, while major non-US currencies and spot gold rebounded.

Mr Trump tweeted that regions such as the European Union had been manipulating exchange rates and lowering interest rates, while the US was raising interest rates and the dollar was getting stronger every day; a strong dollar had taken away US trade competitiveness.

"America should not be punished for doing a good job," Trump said in a subsequent tweet. Policy tightening has now hurt everything we have done. The United States should be allowed to recapture everything it lost because of illegal currency manipulation and bad trade deals. The debt is about to mature and we are raising interest rates.-really? "

The ECB declined to comment on US President Donald Trump's comments accusing the European Union of currency manipulation.

In an interview with CNBC, Trump expressed frankly his views on the US position in the foreign exchange market.

He estimates that exchange rate imbalances with EU countries have cost the United States $150 billion.

On Thursday, Trump already bombarded the Fed. In an interview, he commented on Federal Reserve Chairman Powell's plan to raise interest rates, saying that he did not agree with it because after each rate increase, the Fed wanted to continue to raise interest rates. Trump was referring to FOMC's decision to raise interest rates four times in 2018 amid positive economic data. The Fed's rate hike could disrupt the economic recovery and affect the US economy and competitiveness, and a strong dollar "puts the US at a disadvantage".

It is unusual for the president to publicly criticize monetary policy, but Trump said he is not worried that his remarks will undermine the Fed's independence.

During Trump's comments, Federal Reserve official Brad also made a speech, once again calling on the Fed to keep interest rates rising steadily and calling for a gradual increase in interest rates. Brad said US President Donald Trump's comments would not affect FOMC's decision.

Earlier, Bloomberg analysts pointed out that Trump's remarks on interest rates and the Federal Reserve were said to have crossed the bottom line that US presidents had never touched, and the result could backfire. Trump's "anger" at the Fed could lead to higher interest rates.

Jasper Lawler, head of research at London Capital Group, said, "the US president usually does not comment on monetary policy, but Trump has broken this tradition for the second time. "

"the truth is, Powell is not going to adjust monetary policy just because Trump doesn't like the rising dollar," he said. However, some monetary policymakers may object to raising interest rates because Mr Trump has said so. This possibility is possible, although it is unlikely. "

Adam Button, an analyst at Forexlive, commented that the Fed will not stop raising interest rates because of US President Donald Trump's comments. There is one thing that everyone at the Fed will defend, and that is policy independence. Perhaps some at the Fed may now be more inclined to raise interest rates to show that they "will not give in".

After the president's tweet, the dollar tumbled across the board, falling as low as 94.51, down more than 100 points from yesterday's high of 95.65, which is set to record its worst one-day performance in July.

(USD chart, source: Zerohedge, FX168. Com)

The euro, renminbi and yen strengthened against the dollar: EUR / USD climbed as high as 1.1723, GBP / USD reached 1.3115, and USD / JPY tumbled to 111.60, a two-week low.

(euro / USD 30-minute chart, source: Zerohedge, FX168. Com)

Viraj Patel, an analyst at ABN Amro, said US President Donald Trump's comments could raise concerns about the uncertainty of the US government's dollar policy, leading to the flight of funds to dollar assets. However, we believe that the weakness of the US dollar this time will be lower than that caused by the last time the US government "verbally suppressed" the US dollar.

Osborne, chief foreign exchange strategist at Canada's Bank of Nova Scotia, said in an email that US President Donald Trump's comments that the European Union was manipulating its currency underscored his willingness to overturn conventional policies.

It also points out that markets may think that the risk of exchange rates being used as an additional tool in a trade war has increased, putting the dollar in a danger zone. Since the 1990s, the G10 currency has basically been free of friction and controversy.

Erik Nelson, a foreign exchange strategist at Wells Fargo, said in a telephone interview that US President Donald Trump's tweets about currency manipulation and Fed tightening provided "some recent reasons to sell dollars".

It also said Trump's latest statement "does not have a function to change the direction of Fed policy". There have been comments from "officials of this nature" before!

As the dollar continued to fall, spot gold rebounded, rising as high as 1230 to $1232.10 an ounce.

(30-minute trend chart of spot gold, source: FX168. Com)

Despite Friday's gains, gold prices have fallen nearly 1 per cent this week, showing little sign that the decline is over, having fallen 10 per cent since mid-May.

"for the price to change, you need something to ignite. But it is not clear where this might come from, "said Matthew Turner, an analyst at Macquarie.

Technically, the rebound in gold prices may encounter initial resistance in the 1229-30 area, and if there is a breakthrough, it may further rebound towards the 1237-38 USD / oz region.

On the downside, 1215 is the initial support, followed by the 1212-11 area, if it falls below, it will accelerate down to the 1204 and 1200 gates.