Dollar Gains Amid Fed Independence Concerns

The dollar managed a tentative rebound on Wednesday, amidst fresh concerns over the Federal Reserve's independence following renewed pressure from U.S. President Donald Trump. Trump's intent to dismiss Fed Governor Lisa Cook over alleged misconduct marked another escalation in his attempts to extend influence over the central bank.

Initially weakening, the dollar later strengthened, gaining 0.33% against the yen and pushing the euro down by 0.24%. Sterling followed suit, while the dollar index saw a 0.2% rise. However, the broader gain was limited by Trump's interventions, which further politicize the Fed and unsettle investor confidence.

Market analysts caution against potential implications for monetary policy, noting a regime shift. Also influencing the dollar are predictions of imminent U.S. rate cuts. Trump's speculated replacements for Fed members underscore ongoing uncertainties, as witnessed by market behaviors like the two-year U.S. Treasury yield's decline to its lowest since May.

(With inputs from agencies.)