Trump's Fed Drama: Dollar Balances Amidst Turmoil

The dollar steadied after a brief turmoil caused by President Trump's firing of Federal Reserve Governor Lisa Cook. This move raised concerns over central bank independence. Currency markets reacted mildly, and money markets saw a strong probability of a Fed rate cut, while France faced imminent political upheaval.

The U.S. dollar found stability after a turbulent opening on Tuesday, triggered by President Donald Trump's unexpected dismissal of Federal Reserve Governor Lisa Cook. This action has intensified worries regarding the autonomy of the central bank.

Currencies, including the euro and sterling, experienced little change against the dollar. The dollar index held steady, recovering from earlier losses following Trump's announcement via social media, underscoring a growing rift between him and the Federal Reserve.

In parallel, France's political landscape is under strain, with government bonds reacting negatively to impending budget vote uncertainty, leading to rising bond yields. Meanwhile, cryptocurrencies and China's yuan showcased volatility.

(With inputs from agencies.)