On Wednesday, the U.S. dollar sharply declined against major currencies after President Donald Trump stated that he has three or four candidates in mind to replace Federal Reserve Chair Jerome Powell.

"I know exactly who—three or four people," Trump said at a press conference in The Hague, where he is attending the NATO summit. "I mean, he's leaving fairly soon, thankfully, because I think he's terrible."

Such a statement from the head of state was instantly interpreted by the market as a signal of potential political pressure on the central bank. Investors, concerned about the Fed's independence and possible shifts in monetary policy for political purposes, rushed to lock in profits and sell off dollar assets. This sudden wave of selling drove the U.S. dollar lower against the euro, yen, British pound, and other key currencies. At the same time, U.S. Treasury yields declined, further indicating a loss of confidence in the American economy.

The uncertainty surrounding the future leadership of the Fed is causing nervousness in the financial markets. Investors are unsure what direction the next chair will take in terms of monetary policy and what measures will be adopted to combat inflation and support economic growth.

Trump did not name any specific successors for the central bank role or give a timeline for the decision. Powell's current term as Fed Chair expires in May 2026. Earlier this month, the president mentioned that he was reviewing candidates and that names would be revealed "very soon."

Some of the president's allies have reportedly pushed for Treasury Secretary Scott Bessent to take the position. Trump has also recently praised former Fed Chair Kevin Warsh, calling him "very highly regarded."

Trump's pressure on the Fed appears aimed at lowering interest rates. He has repeatedly criticized the central bank for keeping rates unchanged and has argued that doing so unnecessarily increases borrowing costs for the U.S. government. He believes the Fed is wasting money by maintaining higher rates.

Last week, the Fed held interest rates steady in the 4.25%–4.5% range, where they have been since the beginning of the year. Most policymakers indicated they expect to cut rates by half a percentage point only by the end of 2025.

Trump's comments came a day after Powell testified before the House Financial Services Committee, defending the Fed's stance and emphasizing that the central bank should not rush to adjust its policy. Before lowering rates, Powell said, it is important to assess how the administration's economic agenda—especially the broad tariffs on trade partners—is affecting inflation.

The president frequently changes aspects of his tariff policy, which complicates the Fed's job. The administration is currently negotiating with several trade partners ahead of the July 9 deadline, but so far no tangible progress has been made.

EUR/USD Technical Outlook

Buyers now need to focus on breaking through the 1.1715 level. Only then can they aim for a test of 1.1750. A move beyond that could open the way to 1.1775, but achieving this without support from major market participants may prove difficult. The furthest target is the 1.1810 high. If the instrument declines to around 1.1670, I expect stronger interest from large buyers. If none appear there, it may be better to wait for a test of the 1.1630 low or consider entering long positions from 1.1585.

GBP/USD Technical Outlook

Pound buyers need to overcome the nearest resistance at 1.3730. Only then can they aim for 1.3770, above which further gains will be hard to achieve. The furthest upward target is 1.3820. If the pair declines, bears will attempt to regain control at 1.3680. A successful break of this range would deal a serious blow to the bulls and push GBP/USD down to the 1.3640 low, with a potential move toward 1.3590.