The euro rose in the European market on Tuesday against a basket of global currencies, resuming gains after pausing yesterday amid correction and profit-taking from a three-week high against the US dollar. The rise came on renewed concerns over US assets, particularly after Donald Trump announced the dismissal of a Federal Reserve board member.

Reports indicated that the European Central Bank is likely to keep interest rates unchanged next month, though discussions on monetary easing and further cuts could resume in the autumn if the eurozone economy weakens.

Price Overview

The euro rose against the dollar by 0.35% to 1.1660 dollars, from the opening level of 1.1618 dollars, recording a low of 1.1610 dollars.

The euro ended Monday down about 0.85% against the dollar, due to accelerated correction and profit-taking from a three-week high of 1.1743 dollars.

US Dollar

The dollar index fell on Tuesday by 0.35%, resuming losses after a temporary pause yesterday, moving once again near multi-week lows, reflecting renewed weakness of the US currency against a basket of major and minor counterparts.

The decline came after President Donald Trump announced the dismissal of a Federal Reserve board member, in an unprecedented move undermining confidence in the Feds independence and US assets.

Dismissal of Lisa Cook

President Donald Trump announced late Monday the dismissal of Lisa Cook from her position on the Federal Reserve Board, citing allegations of mortgage-related misconduct.

Trump, who lacks the legal authority to dismiss Fed board members except for cause, backed away from his threat to fire Fed Chair Jerome Powell, whose term expires next May.

Cooks exit from the central bank could accelerate the presidents reshaping of the Federal Reserve Board and the Federal Open Market Committee (FOMC), which sets interest rates. Her term had been set to run until 2038.

For her part, Lisa Cook said: Trump has no authority to dismiss me and I will continue to perform my duties. She added: there is no justification for dismissal and I will not resign.

Legally, Trumps dismissal of Cook can be challenged in federal courts, and ultimately in the Supreme Court.

Congress had restricted the presidents unilateral authority to dismiss Fed governors under the Federal Reserve Act of 1913, which states that the president may only do so for cause.

European Interest Rates

Five sources told Reuters that the European Central Bank is expected to keep rates unchanged next month, though discussions of further cuts could resume in the autumn if the eurozone economy weakens.

ECB President Christine Lagarde said on Saturday at Jackson Hole that the tightening policies adopted in 2022 and 2023 had not led to recession or a sharp rise in unemployment, as had historically been the case.

Money market pricing of a 25-basis-point ECB rate cut in September is currently steady below 30%.

To reprice these expectations, investors in the coming period are awaiting several key economic data releases from Europe, along with further remarks from ECB officials.