USD/CAD trades cautiously around 1.3850 as Trump fires Fed's Cook

• USD/CAD struggles around 1.3850 as the ousting of Fed's Cook has built pressure on the US Dollar.
• Trump removed Fed's Cook over mortgage allegations.
• Investors await Lutnick-LeBlanc trade talks, which are scheduled this week.

The USD/CAD pair trades with caution around 1.3850 against the US Dollar (USD) on Tuesday. The Loonie pair faces slight selling pressure as United States (US) President Donald Trump has fired Federal Reserve (Fed) Governor Lisa Cook over mortgage allegations.

US President Trump had already called Fed's Cook to resign after his political allies accused her about mortgages she holds in Michigan and Georgia.

Market experts seen the event as a major crack on Fed's independence, and expect decisions from the one who will replace Cook to be biased towards Trump's agenda.

At the time of writing, the US Dollar Index (DXY), which tracks the Greenback's value against six major currencies, ticks down to near 98.30.

Going forward, investors will focus on the US Personal Consumption Expenditure Price Index (PCE) data for July to get fresh cues on the Fed's monetary policy outlook. On Friday, Fed Chair Jerome Powell delivered surprisingly dovish remarks on interest rates at the Jackson Hole Symposum, citing rising risks to labor market.

Meanwhile, investors brace a sideways trend in the Canadian Dollar (CAD) ahead of meeting between Canadian cabinet minister Dominic LeBlanc and US Commerce Secretary Howard Lutnick to discuss trade concessions.

Lately, comments from Canada's LeBlanc signaled that he is confident about closing a trade agreement with Washington. "We are looking, I hope, for an agreement that will put us in a better position than we are right now," LeBlanc said in a French-language radio program on Monday.