Morning Note: Trump Denies Powell Firing; Australia Jobless Jumps; Banks Eye Stablecoins

Trump Denies Firing Powell After Market Stirs

Midway through Wednesday’s U.S. session, markets briefly reacted to reports suggesting President Trump might remove Fed Chair Jerome Powell after months of criticising him for not cutting interest rates. The dollar, stocks, and two-year Treasury yields dropped, with the yield curve steepening. The most notable declines were seen in the dollar and short-dated yields.

However, Trump quickly denied any immediate plans to fire Powell, saying it was “highly unlikely,” which helped markets regain composure, especially equities, though the rebound in the dollar and yields was more muted. While no president has ever dismissed a Fed Chair, Trump's repeated pressure on Powell signals ongoing political interference. Rates markets still expect the Fed to hold steady this month, with a 25-bps cut priced in by October and additional easing anticipated in 2026.

(U.S Dollar Index Daily Chart, Source: Trading View)

From a technical analysis perspective, the U.S. Dollar Index has been in a bearish trend since mid-January 2025, as evidenced by a series of lower highs and lower lows. Recently, however, it has shown signs of bullish momentum since early July 2025 but was rejected at the swap zone of 98.40 – 98.70 yesterday, suggesting that bullish momentum remains intact. If the index fails to close above this swap zone in the near term, bearish pressure may resume and potentially drive the index to form a new lower low.

Australia Jobless Rate Hits 2-Year High

Australia’s labour market showed signs of softening in June, with employment rising by just 2,000 jobs, well below expectations of a 20,000 increase. Meanwhile, the unemployment rate unexpectedly climbed to 4.3%, the highest since November 2021, and above May’s 4.1%. This marks a potential turning point for what had been a surprisingly resilient job market, strengthening the case for a potential rate cut by the Reserve Bank of Australia (RBA) in August.

The RBA had forecast unemployment to hit 4.3% by year-end, but the early spike may signal weakening economic momentum. Despite two earlier rate cuts this year, consumer spending remains sluggish, and GDP growth has stayed flat. The central bank is holding rates at 3.85% as it awaits Q3 inflation data later this month to determine if further easing is justified.

(AUD/USD Daily Chart, Source: Trading View)

From a technical analysis perspective, the AUD/USD currency pair was rejected from the resistance zone of 0.6580 – 0.6595, as indicated by a double top candlestick pattern. It is currently retesting the order block at the 0.6475 – 0.6490 level. If this zone fails to hold, bearish momentum may continue to push the pair lower, potentially leading to a retest of the support zone at 0.6350 – 0.6370.

Stablecoins on the Horizon for Big U.S. Banks

Major U.S. banks, including Bank of America and Citibank, are exploring the launch of stablecoins amid growing regulatory support for cryptocurrencies. BofA CEO Brian Moynihan confirmed the bank is working on a stablecoin but did not specify a timeline. He noted that while current client demand is low, the bank plans to move ahead when the time is right, possibly in collaboration with other institutions. Stablecoins, digital tokens typically pegged to fiat currencies such as the U.S. dollar, are widely used to facilitate cryptocurrency trading and fund transfers.

The push comes as the U.S. signals a shift toward more crypto-friendly policies. President Donald Trump has pledged to become the “crypto president,” supporting broader adoption of digital assets. Several pro-crypto bills are expected to advance through Congress this week, potentially laying the groundwork for deeper integration of cryptocurrencies into the traditional financial system.

(Bitcoin Daily Price Chart, Source: Trading View)

From a technical analysis perspective, Bitcoin has been in a bullish trend since April 2025, as indicated by a series of higher highs and higher lows, along with a confirmed double bottom candlestick pattern. Recently, it broke above the key resistance zone of 109,000 – 110,000 with strong bullish momentum.

This week began with continued upward movement but was met with bearish pressure, as shown by Monday’s long upper wick candlestick. The price has since entered a consolidation range between 106,000 and 120,000 at the time of writing, suggesting a possible loss of bullish momentum. As a result, Bitcoin may potentially pull back to retest the previously broken resistance zone of 109,000 – 110,000 before establishing its next directional move.

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