NZD/USD retreats below 0.5850, US Dollar bounces on risk aversion

• The New Zealand Dollar retreats from Monday's highs against the USD, weighed by risk aversion.
• The Dollar regains lost ground as Fed Governour Cook dismisses Trump's order to remove her.
• Concerns about the Federal Reserve's independence are likely to hurt the USD in the longer run.

The New Zealand Dollar is giving away previous gains against the US Dollar, and returns to the lower range of the 0.5800s after retreating from Monday's highs in the area of 0.5880. The risk-off mood amid Trump's attempt to oust Fed Governour Lisa Cook is weighing on the risk-sensitive Kiwi.

The US President, Donald Trump, shocked markets with an unprecedented order to remove Federal Reserve Governor Lisa Cook on an allegation of fraud in a mortgage loan. The Kiwi rose immediately after the news, to pull back later on as Cook refused to resign.

Doubts about the Fed's independence nmay hurt the US Dollar

Trump has been attacking the Fed relentlessly during the last few months, pushing for lower interest rates. This is only the last chapter of a war that has eroded investors' confidence in the central bank´s independence and that might undermine the status of the US Dollar as a reserve currency in the long run.

The pair, so far, remains trading halfway through last week's trading range as the US Dollar Index, which measures the value of the Greenback against the world's most traded currencies, bounces up from Monday´s lows amid a sourer market sentiment.

In New Zealand, data released on Monday revealed stronger-than-expected Retail Sales in the second quarter of the year. These figures highlight a resilient economy, which has eased some of the negative pressure triggered by the dovish RBNZ moneary policy statement delivered last week.