Dollar Faces Decline Amid Fed Rate Cut Predictions and Trump's Monetary Policy Influence

The U.S. dollar remained steady but experienced a 2% drop in August, with expectations of Fed rate cuts in September. President Trump's attempts to influence monetary policy, including moves to dismiss Fed Governor Lisa Cook, have pressured the dollar, as investors anticipate upcoming inflation data.

The U.S. dollar held its ground on Friday but is set for a 2% fall in August against major currencies, driven by growing anticipation that the Federal Reserve will cut interest rates next month. Investors continue to monitor the Fed's actions as President Trump's influence over monetary policy remains a concern.

A legal battle ensues as Fed Governor Lisa Cook filed a lawsuit challenging President Trump's attempt to remove her from office. This latest development is part of Trump's ongoing efforts to reshape the central bank, which have slightly affected the dollar's value on the currency market.

Market responses have been minimal, with slight dollar selling and curve steepening. Investors keep their eyes on upcoming reports and the Federal Reserve's September meeting, as inflation measures such as the PCE price index are reviewed for further monetary policy clues.

(With inputs from agencies.)