Dollar Holds Firm Amid Fed Tensions and Eurozone Turmoil

The U.S. dollar gained ground against the euro and the British pound on Wednesday, though lingering concerns over the Federal Reserve's independence could cap its rise. President Trump's announcement of his intention to dismiss Fed Governor Lisa Cook has spurred legal protest, adding fuel to the ongoing debate about central bank interference.

While the dollar temporarily set aside issues of Fed autonomy, Trump's influence has led to a steeper U.S. Treasury yield curve. According to Jamie Cox of Harris Financial Group, market dynamics suggest Trump's actions are dictating the anticipation of lower interest rates, contributing to a significant reshaping of fiscal expectations.

Simultaneously, political volatility in France, with Prime Minister Francois Bayrou fighting to maintain his government, adds pressure to the euro's stability. Analysts stress that limiting the euro's vulnerability is ECB President Christine Lagarde's confidence in economic recovery and aspirations for the euro's stronger international role.

(With inputs from agencies.)