US PRESIDENT Donald Trump’s latest accusation of currency manipulation has foreign-exchange (FX) analysts game-planning the administration’s next move.

Trump tweeted Wednesday that Europe and China are playing a “big currency manipulation game,” days after he declared a tariff ceasefire with Chinese leader Xi Jinping. For market observers, the president seemed to suggest going beyond mere jawboning. His call to “MATCH, or continue being the dummies who sit back and politely watch as other countries continue to play their games” has strategists considering the possibility that the US Treasury could intervene to weaken the dollar.

The US hasn’t intervened in FX markets since 2011, when it stepped in to strengthen the dollar as part of an international effort after the yen soared in the wake of that year’s devastating earthquake in Japan. But with Trump’s repeated complaints about dollar strength — even after the US refrained from formally labeling China a currency manipulator at the end of May — anything is on the table, according to Canadian Imperial Bank of Commerce.

“The obsession with currency manipulation — a month after the last Treasury report had different conclusions — means we should be prepared for anything,” said Bipan Rai, CIBC’s North American head of foreign-exchange strategy. “The Treasury hasn’t intervened to weaken the dollar for decades, but we wouldn’t be surprised if that changes potentially under Trump.”

The euro touched the day’s high on Trump’s tweet Wednesday before retreating. The latest missive did little to rattle the offshore yuan. The Bloomberg Dollar Spot Index is down about 0.5% this year, after a 3.2% gain in 2018. But using a Federal Reserve trade-weighted measure, the dollar is not far below the strongest since 2002, which threatens to make US exports less competitive abroad.

The risk of intervention increases should the Fed decide not to ease policy at its meeting this month, Rai said. Trump has staged a campaign against Fed Chairman Jerome Powell in recent months, comparing the central bank to a “stubborn child” last month for not cutting rates.

Trump may ramp up his jawboning efforts as other major central banks start to ease, said Anthony Doyle, global cross-asset investment specialist at Fidelity International.

“I wouldn’t be surprised if jawboning was to increase in coming months,” Doyle said in an interview with Bloomberg Television. “Generating inflationary pressures, generating competitiveness through a lower currency is one tool that central banks can use to support their economies and it’s the only game in town at the moment.”

European Central Bank (ECB) policy makers aren’t yet ready to rush into additional monetary stimulus at the July 25 meeting, according to euro-area central-bank officials familiar with the matter. Still, the Governing Council members may tweak its policy language this month to signal more stimulus is imminent, they said earlier this week.

Ng Kheng Siang, Asia Pacific head of fixed income at State Street Global Advisors, said Trump’s jawboning efforts could continue if the ECB eases and the euro weakens. “Clearly if he feels that the US interest is not served, in his eyes, he’ll start to poke and even blast at anyone,” Ng said.

Even if the Fed does lower rates in a few weeks — a move that bond traders overwhelmingly expect — that might not be enough for the president, according to Bank of America Corp.

“The president is likely to get his way at least for the time being,” foreign-exchange strategist Ben Randol said via email.

“However, the problem arises if US economic outperformance continues and the dollar proves accordingly resilient,” he said. “In that case, the temptation to intervene in FX markets will increase if Fed cuts don’t do the trick.” — Bloomberg