FX.co ★ Dollar Slips After Trump Fires Fed’s Cook

The dollar index dropped below 98.3 on Tuesday, retracting gains from the previous day, following President Donald Trump's announcement of the dismissal of Federal Reserve Governor Lisa Cook due to allegations of mortgage fraud. This development has raised concerns regarding the Fed's autonomy and its capacity to conduct monetary policy free from political influence. Analysts have indicated that Cook's removal might increase the likelihood of earlier interest rate cuts, given Trump's persistent advocacy for the central bank to lower borrowing costs. There is now an 83% chance anticipated in the markets that the Fed will implement a 25 basis point rate cut in September. Investors are also focusing on upcoming economic indicators, including the Fed's favored measure of inflation, the PCE price index, which is slated for release on Friday. Meanwhile, Tuesday's agenda features durable goods orders, consumer confidence, the Case-Shiller Home Price Index, and the Richmond Fed Manufacturing Index.