The US Dollar experienced a decline, with the dollar index falling below 98.3. This downturn follows President Trump’s removal of Federal Reserve Governor Lisa Cook, raising concerns about the Fed’s independence and potential for political interference in monetary policy. These events have increased market expectations of earlier interest rate cuts by the Fed.
- The dollar index fell below 98.3.
- President Trump removed Federal Reserve Governor Lisa Cook.
- The dismissal sparked concerns about the Fed’s independence.
- The removal potentially increases the likelihood of earlier interest rate cuts.
- Markets are pricing in an 83% probability of a 25 basis point rate cut in September.
- Upcoming economic data includes the PCE price index, durable goods orders, consumer confidence, the Case-Shiller Home Price Index, and the Richmond Fed Manufacturing Index.
This situation suggests a weakening outlook for the US Dollar in the short term. Concerns about the central bank’s autonomy and the potential for interest rate cuts are putting downward pressure on the currency. The upcoming economic data releases will be critical in determining the extent and duration of this downward trend.