On August 21st, President Trump called for Federal Reserve Board member Lisa Cook to resign, following calls from a Trump supporter to investigate the board member's mortgage situation, further intensifying White House pressure on the Federal Reserve. Federal Housing Finance Agency Director Bill Pulte urged Attorney General Pam Bondi to investigate Cook regarding two mortgages. This represents the latest action in a series of moves by the Trump administration to strengthen legal scrutiny of Democratic officials and appointees. Trump stated on Wednesday that Cook "must resign immediately," citing Pulte's allegations. The Federal Housing Finance Agency Director claimed on social media that these allegations give Trump grounds to dismiss her.

Meanwhile, data released by Japan's Ministry of Finance on Wednesday showed exports fell 2.6% year-over-year in July, exceeding market expectations of 2.1% and marking the largest decline since February 2021. Imports dropped 7.5% during the month, resulting in a trade deficit of 117.5 billion yen. Exports to the United States were particularly weak, falling 10.1% year-over-year, with automobile and auto parts exports plummeting 28.4% and 17.4% respectively. The continued export decline casts a shadow over Japan's economic growth prospects, with markets concerned this could drag the Japanese economy, which has managed growth for five consecutive quarters, into difficulty and prompt the Bank of Japan to adopt a more cautious stance on monetary policy.

Today's key data to watch includes Eurozone August SPGI Manufacturing PMI preliminary reading, UK August SPGI Services PMI preliminary reading, US initial jobless claims for the week ending August 16th, US August Philadelphia Fed Manufacturing Index, Eurozone August Consumer Confidence preliminary reading, and US July existing home sales annualized total.

Gold/USD Gold traded higher with volatility yesterday, posting modest daily gains, currently trading around 3344. Beyond short covering providing some support for gold, September Fed rate cut expectations remain an important factor supporting gold's rise. Additionally, the US Dollar Index's decline under pressure from factors including Fed independence concerns has provided some support for gold. However, signs of easing geopolitical tensions have limited gold's upside potential. Today, watch for resistance around 3360, with support near 3320.

USD/JPY USD/JPY traded lower with volatility yesterday, closing down modestly on the daily chart, currently trading around 147.30. Besides technical selling pressure formed near the 148.00 level weighing on the pair, the US Dollar Index's weakness under pressure from Fed independence concerns and Fed rate cut expectations has been an important factor pressuring the pair lower. Additionally, persisting expectations for Bank of Japan rate hikes continue to weigh on the pair. Today, watch for resistance around 148.00, with support near 146.50.

USD/CAD USD/CAD traded sideways with consolidation yesterday, closing slightly higher on the daily chart, currently trading around 1.3880. Besides cooling expectations for aggressive Fed rate cuts continuing to support the pair, the lingering impact of Canada's recent weak CPI data continues to provide support. However, rebounding oil prices and the declining US Dollar Index have limited the pair's upside potential. Today, watch for resistance around 1.3950, with support near 1.3800.