EUR/USD gathers strength above 1.1500 as Trump threatens Fed independence

• EUR/USD trades firmer near 1.1520 in Tuesday’s early Asian session. 

• US Dollar falls broadly after Trump doubled down on attacks against the Fed’s Powell. 

• The EU considers modifying methane rules for US gas to support trade talks. 

The EUR/USD pair extends its upside to around 1.1520 during the early Asian session on Tuesday, pressured by a weaker US Dollar (USD). The US Dollar Index (DXY) fell to its lowest since March 2022, near 98.30, as traders kept losing confidence in the US economy. 

US President Donald Trump ramped up his criticism of Federal Reserve (Fed) Chair Jerome Powell on Monday via social media, calling him a "major loser" and warning that the US economy may slow if the Fed doesn’t move to immediately cut rates. Concerns over a slowdown in the US, the world’s largest economy, and more worries that Trump may fire Fed’s Powell exert some selling pressure on the Greenback and act as a tailwind for EUR/USD.  

"It's really a buffet for any dollar bear... from the heightened uncertainty around the self-harm from tariffs to the loss of faith even prior to the Powell news," said Vishnu Varathan, head of macro research for Asia ex-Japan at Mizuho.

Furthermore, the European Union (EU) is considering tweaking methane rules for US gas to help trade talks, Reuters reported on Monday. The European Commission is working on its offer for trade talks with the US to attempt to avoid Trump's planned tariffs, with both sides signaling that energy could form part of a broader trade deal. The optimism surrounding trade negotiation could provide some support to the shared currency against the USD in the near term.