The dollar index fell by -0.22% due to President Trump’s move to fire Fed Governor Lisa Cook. Stronger-than-expected US capital goods and consumer confidence reports supported the dollar. Capital goods orders rose +1.1% m/m, while home prices increased +2.14% y/y. US consumer confidence fell -1.3 to 97.4, and the Richmond Fed manufacturing survey rose +13 to -7.

Federal funds futures price in an 89% chance of a -25 bp rate cut in September and 50% for a second cut in October. EUR/USD rose by +0.28% on the dollar weakness. The euro faces pressure from French consumer confidence falling to a 1.75-year low and political turmoil. Diplomatic efforts continue to end the Ukraine war.

Japanese yen is up due to dollar weakness and higher JGB bond yields. Japan’s PPI services prices eased to +2.9% y/y. Gold reached a 2-week high on dollar weakness and safe-haven demand after Fed Governor Cook’s firing. Silver dropped on better-than-expected US economic reports. Geopolitical risks continue to support precious metal prices.

Read more at Yahoo Finance: Dollar Falls on Threats to Fed Independence