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Updates with Asian currency moves, additional context
Investing.com-- Asian currencies and the U.S. dollar were largely subdued on Tuesday amid escalating concerns over the Federal Reserve’s independence following President Donald Trump’s unprecedented firing of Governor Lisa Cook.
The US Dollar Index, which measures the greenback against a basket of major currencies, fell 0.1% in Asia hours after trimming some of the losses earlier in the session.
US Dollar Index Futures also traded 0.1% lower as of 04:02 GMT.
Trump fires Fed’s Lisa Cook over alleged mortgage fraud.
President Trump announced Cook’s immediate removal in a social media post late Monday, citing allegations that she falsely declared two properties as primary residences in 2021 to secure favorable mortgage terms.
The Federal Housing Finance Agency (FHFA), led by Trump ally Bill Pulte, referred the matter to the Justice Department, initiating a criminal investigation.
Cook, appointed by former President Joe Biden in 2022, denied the allegations and challenged the legality of her dismissal, asserting that such a move undermines the Fed’s constitutionally protected independence, according to a Washington Post report.
This development has injected uncertainty into global financial markets, with investors questioning the potential politicization of U.S. monetary policy. The U.S. dollar remained subdued, reflecting concerns over the Fed’s future policy direction and credibility.
Asian currencies rangebound; RBA meeting mins in focus
The Japanese yen initially gained against the dollar but pared gains, with the USD/JPY pair trading 0.1% lower.
In China, the yuan’s onshore pair USD/CNY was little changed, while the offshore pair USD/CNH ticked 0.1% lower.
The Australian dollar’s AUD/USD pair ticked 0.1% lower. The Reserve Bank of Australia indicated in its August 11-12 meeting minutes that further policy easing may be needed over the coming year.
The South Korean won’s USD/KRW inched up 0.1%, while the Singapore dollar’s USD/SGD also traded flat.
The Indian rupee’s USD/INR gained 0.2%. The U.S. is set to impose an additional 25% penalty tariff on Indian goods starting August 27 in response to India’s purchase of Russian oil.