USD Index Falls 0.22% as Trump Threatens Fed Independence

The US Dollar Index declined 0.22% today amid growing concerns over Federal Reserve independence after President Trump moved to fire Fed Governor Lisa Cook. This political interference in monetary policy operations has triggered risk-off sentiment in currency markets, with traders pricing in increased uncertainty around future Fed decisions. The dollar weakened against most major currencies, with EUR/USD gaining approximately 25 pips to 1.0875 and GBP/USD advancing to 1.3120. Markets are particularly sensitive to Fed independence issues as they could impact the central bank's ability to conduct effective monetary policy and maintain price stability. Technical indicators show the DXY breaking below the 103.50 support level, potentially opening the path to 103.00. Traders should monitor upcoming PCE inflation data and any further political developments that could exacerbate dollar weakness or prompt safe-haven flows back into USD positions.