The U.S. dollar held steady near 98.32 on Tuesday, after recovering from early losses of more than 0.4% following President Trump’s announcement of the dismissal of Federal Reserve Governor Lisa Cook. This performance came after a strong start to the week, during which the dollar posted its biggest daily gain of the month on Monday.
Trump’s move to fire Cook marked an unprecedented development that sparked widespread debate over the independence of the U.S. central bank. While the president justified the decision with allegations related to mortgage loans, Cook denied the claims, stating that the dismissal was unlawful and that the president had no such authority. With the recent resignation of Adriana Kugler and the appointment of Stephen Miran, Trump’s influence within the board appears to be increasing, raising investor concerns about direct political interference in monetary policy.
In Europe, the euro fell 0.1% to 1.1607, pressured by political tensions in France after Prime Minister Bayrou’s government failed to secure enough support in a confidence vote over the budget plan. This situation revived memories of last year’s turmoil and raised questions over whether the impact will remain localized or spread to weigh more broadly on the single currency. By contrast, the British pound held steady near 1.3466, supported by the Bank of England’s relatively hawkish stance.
In Asia, currencies traded in tight ranges. The Japanese yen initially strengthened as a safe haven before giving up some gains, with USD/JPY settling at 147.76. In China, the onshore USD/CNY pair remained stable, while the offshore pair slipped 0.1%. The Australian dollar fell to 0.6478 after the Reserve Bank of Australia’s meeting minutes suggested further easing could be considered in the year ahead.
Elsewhere, the South Korean won rose 0.1% against the dollar, while the Singapore dollar remained largely unchanged. The Indian rupee weakened 0.2%, pressured by trade tensions with Washington as the U.S. prepares to impose an additional 25% tariff on Indian goods starting August 27 in response to India’s continued purchases of Russian oil.
Overall, global markets remain cautious amid a mix of political and economic factors: White House interference with the Fed, political unrest in Europe, and trade tensions across Asia. Attention now turns to key U.S. economic data due this week, including consumer confidence, the revised second-quarter GDP, and the Fed’s preferred inflation gauge (Core PCE), all of which are expected to play a pivotal role in shaping the dollar’s trajectory in the weeks ahead.
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