Trump’s move to fire Fed Governor Lisa Cook via social media sent the U.S. dollar tumbling, with gold surging above USD 3,385 and safe-haven flows boosting JPY and CHF. The legality of the firing was quickly questioned, fuelling concerns over Fed independence and adding to pressure on the dollar.

Trump posted a letter on his social media platform announcing the firing of Federal Reserve Governor Lisa Cook, a move that sent the dollar plunging and gold surging above USD 3,385. His attempt to oust Cook undercut the USD on two fronts: by signalling his desire to stack the Fed with loyalists to force rate cuts, and by undermining confidence in the Bank’s independence.

The dollar weakened broadly, with gold the standout gainer and safe-haven flows into JPY and CHF driving USD/JPY down to 147.00 and USD/CHF to 0.8030. EUR, GBP, AUD, and NZD also advanced. The dollar later clawed back some ground, though mainly as modest retracement.

Legal questions quickly followed Trump’s post, with debate over whether he has the authority to dismiss a Fed governor at all. Powell could set a precedent by insisting Cook remain during the challenge, while some suggested a middle ground of her staying on but not voting until the courts decide. More cynical takes held that Trump’s social media theatrics were designed to stir dollar and gold moves for the benefit/profit of his circle.

Other developments were overshadowed by the firing saga. New York Fed President John Williams spoke but offered no policy outlook, while RBA minutes read as less hawkish than expected. Trump threatened countries that have digital taxes with ‘subsequent additional tariffs’ on their goods if those nations do not remove such legislation.

Source: Forex Live