The dollar index (DXY00) is down 0.22% amid pressure from President Trump’s attempt to fire Fed Governor Lisa Cook, who stated she will not resign. If successful, it could erode investor confidence in the Fed and the dollar, leading to a potential shift to non-dollar assets. In related economic data, US capital goods new orders rose 1.1% month-on-month in July, surpassing expectations of 0.2%.
Foreign exchange markets reacted, with the euro rising 0.28% against the dollar, although it faced limitations due to a decline in the French consumer confidence index to a 1.75-year low. In Japan, the yen slightly increased on dollar weakness amid higher government bond yields, while Japan’s July PPI services prices rose only 2.9% year-on-year, weaker than expected.
The Federal Reserve’s September meeting is discounted for a 25 basis point rate cut at 89%, with a 50% chance for a second cut in October. Precious metals prices are mixed today, with gold rising due to safe-haven demand linked to political uncertainties, both in the U.S. and Europe.
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