The US dollar fell on Thursday as investors awaited monetary policy signals from the Federal Reserve’s Jackson Hole symposium, while concerns over central bank independence resurfaced following the latest attack from President Donald Trump.

The euro and the pound steadied at $1.1652 and $1.3451 respectively, while the yen and the Swiss franc posted minor losses.

Odds of a Fed rate cut next month eased slightly to 82%, offering limited support to the dollar. Focus remained on whether Chair Jerome Powell would counter market expectations for a September cut in his speech on Friday.

Kenneth Broux, head of corporate FX and rates research at Société Générale, said: “The risks are skewed. Because the market has already priced in a cut, the danger is reverting back to a 50-50 scenario.” He noted this could trigger selling in short-dated Treasuries and push the dollar higher.

Meanwhile, Trump’s call for Fed Governor Lisa Cook to resign — based on allegations from a political ally — revived investor worries over his attempts to influence the central bank. Trump has repeatedly criticized Powell for being “too slow” to cut rates, and urged his resignation, while admitting that the Fed’s unique legal structure prevents firing board members over policy disputes.

Prashant Newnaha, senior APAC rates strategist at TD Securities, said: “These developments could raise questions about the Fed’s supervisory and regulatory functions, but they carry almost no immediate impact on monetary policy.” He added this explained the relatively calm FX reaction, as the dollar initially slipped before trimming losses and moving higher.

Investors expect Trump to replace Powell, whose term ends in May, with a more dovish candidate. Earlier this month, Trump announced he would nominate Council of Economic Advisers chair Steven Miran to fill a vacant Fed seat after Adriana Kugler’s surprise resignation.

The dollar index rose 0.1% to 98.337, set for a 0.4% weekly gain. The 10-year Treasury yield inched up to 4.30%, while the 2-year yield, more sensitive to policy, edged higher to 3.756%.

Some analysts cautioned markets may be disappointed by Powell’s speech on Friday, highlighting lingering uncertainty over the inflationary impact of Trump’s tariffs.

Elsewhere, Norway’s krone rose 0.4% versus the dollar and 0.5% versus the euro after stronger-than-expected non-oil GDP growth in Q2, alongside an upward revision to Q1 data.

In China, investor bets against the yuan climbed to their highest since mid-May, fueled by rising economic concerns, according to a Reuters survey released Thursday.

In crypto markets, Bitcoin slipped 0.6% to $113,741, while Ether dropped 1.6% to $4,285.89.

Gold prices declined in the European market on Thursday, resuming losses that had briefly paused yesterday, once again approaching a three-week low under pressure from a stronger US dollar against a basket of global currencies.

Later today, the annual Jackson Hole Economic Symposium kicks off, where Federal Reserve Chair Jerome Powell is scheduled to speak tomorrow, Friday. His remarks are expected to provide strong clues regarding the path of monetary easing and interest rate cuts during the remainder of this year.

Price Overview

Gold prices today: Gold fell by 0.4% to $3,334.35 per ounce, from the opening level of $3,348.42, after hitting an intraday high of $3,352.13.

At Wednesday’s settlement, gold gained 1.0% in its first increase in three sessions, after earlier touching a three-week low at $3,311.58 per ounce.

US Dollar

The US Dollar Index rose 0.1% on Thursday, resuming gains that had briefly halted yesterday, reaching a two-week high of 98.44 points and reflecting strength in the greenback against a basket of major and minor currencies.

Federal Reserve Governor Lisa Cook reiterated her commitment to her post despite President Donald Trump’s calls for her resignation over alleged mortgage fraud.

Minutes from the Fed’s latest policy meeting revealed divisions over concerns regarding tariffs, inflation, and the labor market.

US Interest Rates

According to the CME FedWatch Tool: market pricing of a 25 basis-point rate cut in September remains steady at 81%, with a 19% probability assigned to rates staying unchanged.

For the October meeting, markets are pricing a 91% chance of a 25 basis-point cut, versus a 9% chance of no change.

To reassess these probabilities, investors are awaiting key US sector data due later today for August.

Jackson Hole

Central bankers from around the world will attend the symposium beginning later today, though market attention will remain focused on Powell’s speech tomorrow, as traders look for signals on the likelihood of a US rate cut in September.

Gold Outlook

Brian Lan, managing director at Singapore-based GoldSilver Central, said: “We don’t think gold prices will rise significantly, and we see them stabilizing for now.”

He added: “Even if rates are cut slightly, we may see a modest uptick in gold, with $3,400 as a possible level. Otherwise, prices may continue to stabilize or dip slightly, approaching $3,300.”

SPDR Gold Trust

Holdings in SPDR Gold Trust, the world’s largest gold-backed ETF, fell by 4 metric tons yesterday, marking a second consecutive daily decline. Total holdings dropped to 958.21 metric tons, the lowest since August 6.

The euro declined in European trading on Thursday against a basket of global currencies, resuming losses after a temporary pause yesterday versus the US dollar, and approaching its lowest level in a week. This comes as renewed demand for the dollar continues, with investors viewing it as the best available investment.

Expectations for a European interest rate cut in September weakened due to persistent inflationary pressures facing European Central Bank policymakers. To reassess those expectations, investors await the release of key sector data in Europe for August later today.

Price Overview

• EUR/USD fell 0.1% to $1.1641 from the opening price of $1.1651, with a session high at $1.1655.

• The euro ended Wednesday’s session with less than a 0.1% gain against the dollar, its first in three days, after touching a one-week low of $1.1622 earlier in the day.

US Dollar

The US Dollar Index rose 0.1% on Thursday, resuming gains after a pause yesterday, moving close to a two-week high of 98.44 points, reflecting broad dollar strength against both major and minor currencies.

Federal Reserve Governor Lisa Cook reaffirmed her intention to remain in office despite President Donald Trump’s calls for her resignation over alleged mortgage fraud.

Minutes from the Fed’s latest policy meeting showed divisions over tariffs, inflation, and the labor market outlook.

Traders currently see around an 80% chance of a 25-basis point Fed rate cut in September, with expectations of a total 52 basis points of easing through the rest of the year.

European Interest Rates

• Recent eurozone inflation data showed persistent upward pressure on ECB policymakers.

• According to Reuters, a clear majority in the ECB’s latest meeting favored keeping interest rates unchanged in September, marking a second consecutive meeting without changes.

• Money market pricing shows the probability of a 25-basis point rate cut in September remains below 30%.

• To reassess these odds, investors are awaiting the release of key European sector data for August later today.

Euro Outlook

At Economies.com, we expect that if upcoming European sector data comes in stronger than currently anticipated, the likelihood of a September ECB rate cut will diminish, thereby supporting a rise in the euro’s exchange rate in global currency markets.

The Japanese yen declined in Asian trading on Thursday against a basket of major and minor currencies, moving into negative territory versus the US dollar after two days of gains. This comes ahead of the Jackson Hole Economic Symposium, where most central bank governors are expected to speak.

Amid rising doubts about the likelihood of the Bank of Japan raising interest rates by 25 basis points in September, investors are awaiting further evidence on the path of monetary policy normalization for the remainder of the year.

Price Overview

• USD/JPY rose 0.15% to ¥147.51, from an opening price of ¥147.31, with a low at ¥147.25.

• The yen ended Wednesday up 0.25% against the dollar, marking a second consecutive daily gain, supported by concerns over Federal Reserve stability due to Trump’s continued pressure on US policymakers.

US Dollar

The US Dollar Index rose 0.1% on Thursday, resuming gains after pausing yesterday, nearing a two-week high at 98.44 points, reflecting broad strength against major and minor currencies.

Federal Reserve Governor Lisa Cook reaffirmed her commitment to remain in office despite President Trump’s calls for her resignation over alleged mortgage fraud.

Minutes from the Fed’s latest policy meeting showed divisions over tariffs, inflation, and the labor market outlook.

Traders currently see around an 80% chance of a 25-basis point Fed rate cut in September, with expectations of a total 52 basis points of easing for the rest of the year.

Jackson Hole

Central bankers from around the world will attend the symposium, beginning later today, though the main focus will be on Fed Chair Jerome Powell’s speech on Friday. Markets are looking for signals on the likelihood of a September rate cut.

Japanese Interest Rates

• Market pricing for a 25-basis point Bank of Japan rate hike in September remains steady near 40%.

• Investors await further data on inflation, unemployment, and wages to reassess these expectations.

• BoJ Governor Kazuo Ueda is scheduled to speak at the Jackson Hole symposium, and his remarks are expected to provide more clarity on the monetary policy outlook.

• A survey shows 63% of economists expect the BoJ to raise the benchmark rate to at least 0.75% by year-end, up from 54% in July.

• Another survey shows 92% of economists expect the BoJ to keep rates at 0.50% through the end of September.