US dollar, Treasuries jolted after move to dismiss Cook

The US dollar skidded in a volatile session on Aug 25 after President Donald Trump announced he was removing Federal Reserve governor Lisa Cook, the latest in a series of attacks on the US central bank's independence that is undermining confidence in US assets.

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TOKYO -

Asian shares followed declines on Wall Street, with Japan's Nikkei and Hong Kong's Hang Seng Index closing down 1 per cent as prospects for a Fed rate cut in September became less certain. US stock futures retreated.

The dollar index fell as much as 0.4 per cent before recovering after Mr Trump made the announcement in a letter to Dr Cook that he posted on social media.

An index measuring the greenback's strength against a basket of six currencies was last 0.1 per cent lower. The pullback came after the US currency had registered its biggest daily gain of the month on Aug 25. The US currency was little changed against the Singapore dollar at 1.286.

"Markets aren't panicking, but they are recalibrating; earlier rate cuts look more likely after Cook's removal," said Ms Charu Chanana, chief investment strategist at Saxo in Singapore.