Trump's sudden withdrawal from the Federal Reserve Board of Governors triggers financial turmoil! The dollar falls sharply, and dark currents surge in the crypto market, as the crisis of Central Bank independence shakes the global market.

US President Trump abruptly fired Federal Reserve Board of Governors member Lisa Cook on the grounds of "suspected mortgage fraud," triggering severe fluctuations in the financial markets. The dollar index fell by 0.3%, and the US Treasury yield curve showed a divergent trend, with market concerns about the political independence of the Fed surging. Meanwhile, cryptocurrencies ended their consecutive days of volatility, showing a pattern of mixed rises and falls, with Bitcoin continuing its downward trend approaching four consecutive losses. Investors are closely watching the potential impact of central bank personnel changes on the liquidity of digital assets.

[Trump fires The Federal Reserve Board of Governors, causing market turbulence]

In the Asian trading session on Tuesday morning, the US dollar index fell by 0.3% to 98.187, giving back the largest single-day gain of this month. Previously, US President Trump publicly announced on social media the dismissal of Federal Reserve Board of Governors member Lisa Cook on the grounds of "alleged mortgage fraud." Charu Chanana, Chief Investment Strategist at Saxo Bank in Singapore, stated: "The market is not in panic, but it is re-pricing. After Cook's dismissal, the market expects an earlier rate cut to come."

[The independence of the Fed faces unprecedented challenges]

This move marks a sharp escalation in the struggle between Trump and the Fed. Sydney IG market analyst Tony Sycamore pointed out: "Following last week's capitulation by Fed Chair Powell to pressure, Trump's dismissal of Cook has once again raised questions about the independence of the Fed, further undermining its ability to implement impartial monetary policy free from political influence." The yield on the two-year U.S. Treasury fell by 3.6 basis points to 3.694%, while the yield on the 30-year long bond rose by 3.3 basis points to 4.922%.

[Major Currency Pair Exchange Rate Performance]

The US dollar against the Japanese yen is reported at 147.18 yen, up 0.4% from the US close. The euro against the US dollar rose 0.2% to 1.1650, reversing its downward trend as the three major opposition parties in France refused to support the Prime Minister's confidence vote on September 8. The British pound against the US dollar rose 0.2% to 1.3483. The offshore yuan against the US dollar is reported at 7.1527, up 0.2% and hitting a nearly one-month high, in line with the rise of the Chinese stock market — the Shanghai Composite Index hit a ten-year high on Monday.

[Trends of Commodity Currencies and Crypto Assets]

The Australian dollar rose 0.15% to 0.64915 against the US dollar, with the market following the upcoming release of the Reserve Bank of Australia's August meeting minutes. The New Zealand dollar increased 0.1% to 0.5856 against the US dollar. After several days of fluctuation, crypto assets showed mixed performance, with Bitcoin latest down 0.2%, potentially marking a fourth consecutive day of decline; Ethereum fell 0.1%, and crypto assets investors are closely monitoring the impact of Fed policy changes on liquidity in the digital asset market.

[Conclusion]

Political interference in the independence of the Central Bank has triggered a repricing in the market, leading to increased short-term volatility of the dollar, while the correlation between the crypto assets market and traditional financial markets continues to strengthen. Investors need to follow the potential impact of personnel changes at the Fed on the September interest rate decision.