USD weakens as Fed rate cuts loom amid political pressure

The US Dollar has weakened broadly across major pairs as markets price in imminent Federal Reserve rate cuts amid mounting political pressure on the central bank's independence. The dollar index has declined 0.5% in early trading, with EUR/USD climbing to 1.1050 and GBP/USD advancing to 1.2950. Market participants are increasingly concerned about the Fed's ability to maintain policy independence, with futures markets now pricing in a 75% probability of a rate cut at the next FOMC meeting. The weakness in USD has provided a boost to commodity currencies, with AUD/USD rising 0.6% and NZD/USD gaining 0.4%. Gold prices have surged to $2,450/oz as investors seek safe-haven assets. Geopolitical tensions surrounding the upcoming US-Russia peace summit are adding to market uncertainty, potentially accelerating the dollar's decline if diplomatic efforts fail.