EUR/USD steadies as Trump targets Fed's Cook, markets await FOMC Minutes

• The Euro rebounds from a one-week low, with EUR/USD snapping a two-day losing streak amid US Dollar weakness.
• US Dollar under pressure after US President Donald Trump demands Fed's Lisa Cook resign over mortgage fraud claims.
• Eurozone inflation steady at 2.0% YoY in July; core inflation unchanged at 2.3%.

The Euro (EUR) holds firm against the US Dollar (USD) on Wednesday, snapping a two-day losing streak, as the Greenback comes under pressure following renewed political tension surrounding the Federal Reserve (Fed). A steady Eurozone inflation print further supported the common currency, while traders await the Federal Open Market Committee (FOMC) July meeting minutes, due at 18:00 GMT, for fresh policy guidance.

At the time of writing, EUR/USD is trading around 1.1657, recovering modestly from a one-week low of 1.1622 touched during early European trading. The pair is showing tentative signs of stabilization following a two-day decline, as buyers defend the 1.1600 psychological support level.

Meanwhile, the US Dollar Index (DXY), which tracks the Greenback's value against a basket of six major currencies, eases to 98.12 after briefly rising to a one-week high of 98.44 earlier in the session, as political pressure mounts following US President Donald Trump's call for the resignation of Fed Governor Lisa Cook.  Posting on his Truth Social platform, Trump accused Cook of mortgage fraud, amplifying allegations made by Federal Housing Finance Agency (FHFA) Director Bill Pulte, who urged the Department of Justice to investigate the matter.

The latest Eurostat release confirmed that Eurozone inflation remained stable in July, with the headline Harmonized Index of Consumer Prices (HICP) rising 2.0% YoY and flat on a monthly basis, both in line with expectations. Core inflation rose 2.3% YoY, while the monthly core reading slipped 0.2%, unchanged from the previous month, indicating that underlying price pressures remain steady.

Earlier in the day, European Central Bank (ECB) President Christine Lagarde struck a cautious tone during her remarks at the World Economic Forum's business summit in Geneva. Lagarde warned that Eurozone growth is likely to weaken in the third quarter, noting that a slowdown was already evident in Q2. She attributed the cooling momentum to fading demand following earlier frontloading of activity amid trade uncertainty. While Lagarde welcomed the recent EU-US trade agreement as a source of short-term relief, she cautioned that "significant risks remain, particularly related to sector-specific tariffs and geopolitical uncertainty."

Looking ahead, traders will closely monitor the Fed meeting minutes, which could offer fresh insights into the Fed's internal debate over the inflation trajectory and interest rate outlook. Markets are largely pricing in a rate cut at the September meeting, and any hint of dovish dissent or discussion around rate cut timing could weigh further on the US Dollar and offer near-term upside potential for EUR/USD.