Markets were quick to react to President Trump’s decision to fire Federal Reserve Governor Lisa Cook.
The U.S. dollar softened immediately, as traders weighed the possibility of political interference undermining confidence in the Fed’s policy outlook.
The EURUSD found support near 1.1690, before retracing as Cook’s stance restored some market confidence.
Cook has refused to step down and is preparing legal action, arguing that the president lacks the authority to remove a sitting governor.
If Trump doubles down or the legal fight escalates, we could expect volatility with a possible bias for euro strength. If 1.1640 breaks cleanly to the upside, EUR/USD could attempt to retest the 50% retracement at 1.1660, and then the 61.8% level near 1.1680.
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