Euro Caught in the Middle of Fed Noise, French Risk
The euro swung between gains and losses, supported by fresh turmoil around the Federal Reserve and pressured by political risk in France.
EUR/USD trades modestly higher at 1.1623; it rose as much as 0.4% to 1.1660 after Trump moved to remove Governor Lisa Cook from the Fed in the wake of allegations that she falsified documents on mortgage applications.
Cook said in a statement released by her lawyer that Trump has no authority to fire her and she won’t resign. Cook’s lawyer, Abbe Lowell, said they plan to take “whatever actions are needed to prevent” Trump’s “illegal action”.
The pair fell to its session low at 1.1602 after the European open; French assets came under pressure for a second day as PrimeMinister Francois Bayrou’s decision to call a confidence vote continued to ripple through markets.
While front-end euro volatility jumped earlier, the move quickly met fading demand; client sentiment remains dollar-bearish, yet lack of follow-through keeps many desks sidelined, Europe-based traders say.
The Bloomberg Dollar Spot Index is little changed, paring a 0.3% decline; US curve is twist steepening, with the 10-year yield up 2bps to around 4.30%
USD/JPY down at 147.62 after earlier falling as much as 0.6% to 146.99
GBP/USD modestly up at 1.3461
AUD/USD down 0.1% to 0.6478; Aussie reversed an earlier gain of 0.2% after minutes of the Reserve Bank of Australia meeting showed the central bank board expects to lower interest rates further over the coming year.
Source : Bloomberg
