Precise Investors Editorial Team
The dollar index dropped 0.1% after a 0.7% gain on Monday
The dollar and longer-dated U.S. Treasuries slipped on Tuesday after President Donald Trump announced he was firing a Federal Reserve governor, an unprecedented move that further undermines confidence in the Fed’s independence and U.S. assets.
The U.S. currency dropped against the euro after Trump said he was removing Lisa Cook from her position on the Fed’s board of directors, citing allegations of improprieties in obtaining mortgage loans and escalating the president’s battle against the central bank.
Stock markets in Asia followed declines on Wall Street as the news muddied the outlook for Fed policy and stoked uncertainty over prospects for a rate cut next month. Gold hit a two-week high and U.S. equity futures dropped, as Trump also renewed tariff threats on trade partners.
All of this, tariffs included, is just another reason the U.S. can’t be trusted, said Bart Wakabayashi, the Tokyo Branch Manager of State Street. There’s no credibility. That’s the basis of the U.S. being the safest investment in the world. If you’re a responsible investor, it gives you pause.
The euro gained 0.1% to $1.1631. The yen was flat at 147.82 per dollar after earlier climbing more than 0.5%.
The dollar index dropped 0.1% after a 0.7% gain on Monday.
The yield on the benchmark U.S. 10-year Treasury note rose 3.1 bps to 4.306%. The yield on the 30-year bond rose 4.7 bps to 4.936%.
The two-year Treasury yield, which typically moves in step with interest rate expectations for the Fed, declined 1.3 bps to 3.717%.
MSCI’s broadest index of Asia-Pacific shares outside Japan was down 0.5%, after U.S. stocks ended the previous session with mild losses. Japan’s Nikkei index dropped 0.9%.
Euro Stoxx 50 futures were down 0.53%, German DAX futures were down 0.45% and FTSE futures dropped 0.35%. The U.S. S&P 500 e-minis slipped 0.07%.
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