On August 27th, the Federal Reserve stated on Tuesday that it will comply with any court ruling regarding President Trump's legal authority to dismiss Fed Board member Lisa Cook. The Fed noted in a spokesperson statement:

Cook has indicated through her private counsel that she will promptly challenge this action in court and seek judicial determination to confirm her right to continue serving as a Senate-confirmed member of the Federal Reserve Board.

While the spokesperson did not directly criticize Trump's actions, the statement clearly emphasized:

The Federal Reserve System was established by Congress to fulfill its statutory mission—including promoting maximum employment, price stability, and a well-functioning financial system.

Congress, through the Federal Reserve Act, stipulated that Board members serve long, fixed terms, with the President only able to remove them "for cause."

The long terms of Board members and protection from arbitrary removal are important safeguards ensuring that monetary policy decisions are based on data, economic analysis, and the long-term interests of the American people.

Additionally, Brad, former St. Louis Fed President who was nominated by the Trump administration to replace Powell, indicated that he believes a September rate cut is entirely possible. Brad stated: "Powell used this speech to solidify expectations for a 25 basis point cut in September, which I had long anticipated, and the market expected this. He examined recent labor market reports, which were very weak, so I think this is a done deal." He added: "Beyond that, he didn't say much about the October or December meetings. I've already said there will be 100 basis points of cuts by 2026. I think this can be adjusted during the process, ultimately reaching a full 100 basis points. But to observe the data, I'll take it slowly." Regarding the Fed's policy framework review, Brad said Powell did well in outlining the Fed's conclusions.

Today's key data releases include Germany's September GfK Consumer Confidence Index and the UK's August CBI Retail Sales Balance.

**USD Index** The Dollar Index declined with volatility yesterday, closing slightly lower on the daily chart, currently trading around 98.30. Besides profit-taking pressuring the currency, President Trump's statement about dismissing Cook and the resulting blow to Fed independence were significant factors pressuring the currency lower. Additionally, rising Fed rate cut expectations continued to weigh on the currency. However, strong U.S. economic data during the session limited the downside for the currency. Today, focus on resistance around 98.80, with support near 97.80.

**EUR/USD** The Euro rose with volatility yesterday, closing slightly higher on the daily chart, currently trading around 1.1640. Besides technical buying around the 1.1600 level providing some support, the Dollar Index's weakness under pressure from Fed independence concerns and rate cut expectations also supported the Euro. Furthermore, ECB signals of pausing easing measures provided additional support for the currency. Today, focus on resistance around 1.1750, with support near 1.1550.

**GBP/USD** The Pound rose with volatility yesterday, closing slightly higher on the daily chart, currently trading around 1.3480. Besides short covering providing some support, the Dollar Index's weakness under pressure from rising Fed rate cut expectations and Fed independence concerns was also an important factor supporting the Pound's rebound. However, strong U.S. economic data and BoE rate cut expectations limited the currency's upside potential. Today, focus on resistance around 1.3550, with support near 1.3400.