The US Dollar continued to lose ground against most of its major counterparts in Asian trade having plunged in late North American trade. The selloff followed after US President Donald Trump told the Wall Street Journal that it is “getting too strong”.

The Australian and New Zealand Dollars outperformed as the highest-yielding alternatives to the benchmark currency in the G10 FX space. The Aussie enjoyed outsized gains inspired by an impressively strong set of local employment figures.

Outperformance in the commodity bloc was seemingly reflective of a curious drop in Treasury bond yields and a flattening of the 2017 rate hike path implied in Fed Funds futures after Trump’s bombshell remark crossed the wires. It almost appeared as though markets confused fiscal and monetary policy.

The White House has few tools besides jawboning to practically direct exchange rates, at least in the near term. Further out, Mr Trump’s expansionary economic platform – if actually implemented – would probably boost inflation and push the Fed toward faster rate hikes, sending the greenback upward.

A possible explanation is that Trump’s verbal intervention may invite international retaliation, which could echo negatively for broad-based risk appetite. In turn, that may force a Fed reluctant to tighten against a backdrop of market turmoil to scale back its policy normalization plans.

This too seems like a stretch however. The President’s inability to unilaterally back up his pronouncements means their ability to move markets is likely to be rapidly diminishing. In fact, it is plausible to suspect that the latest selloff’s magnitude reflects thin pre-Easter holiday liquidity more than anything else.

This means the benchmark currency may be back on the offensive before long. The upcoming release of the March set of US PPI figures may help on this score. Expectations call for the highest level of core wholesale inflation since December 2014, at 1.8 percent year-on-year.