U.S. President Donald Trump fired Federal Reserve Governor Lisa Cook in an unprecedented move that sparked concerns about the Federal Reserve's independence and future monetary policy. The dollar initially fell sharply against major currencies amid market uncertainty but later steadied as investors recalibrated expectations. Trump's action intensified speculation about potential interest rate cuts by the Fed in September, contributing to a decline in the dollar and a rise in longer-dated U.S. Treasury yields. Gold prices responded by reaching a five-week peak, supported by the softer dollar and safe-haven demand amid ongoing worries over Fed autonomy. Trump has indicated readiness for a legal battle and is seeking to gain a majority on the Federal Reserve Board to push for lower interest rates. Market participants are closely watching upcoming U.S. inflation data, which is expected to influence the Fed's policy direction and investor sentiment.