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Dollar Up Slightly On Yen, Trump Fed Pick Eyed

10/20/2017, 9:47:31 AMBasics of Trading
Dollar Up Slightly On Yen, Trump Fed Pick Eyed

The dollar was quoted slightly higher in early Asia on Friday against the yen as markets looked for signs President Donald Trump may soon name the next Fed chief.

USD/JPY changed hands at 112.56, up 0.02%, while AUD/USD traded at 0.7879, flat.EUR/USD was last quoted at 1.1848, down 0.03%.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was last quoted down 0.32% to 93.00.

Overnight, the dollar fell sharply, adding to earlier losses, following a drop in bond yields after a report suggested that Federal Reserve Governor Jerome Powell is leading the race to succeed Janet Yellen as next Fed Chairman.

Powell is the front runner to become the chair of the U.S. central bank after President Donald Trump concluded a series of meetings with five finalists Thursday, three administration officials said, according Politico report published Thursday.

Powell is widely viewed as the least hawkish candidate - apart from Yellen - compared to his peers on the shortlist to head the Federal Reserve in February.

On Thursday, the dollar eased from session lows against a basket of major currencies after better-than-expected economic data on manufacturing and jobs lifted sentiment on the U.S. economy.

The Philadelphia Fed said Thursday its manufacturing index rose to a reading of 27.9 this month, from 23.8 in September, beating economists forecast of a reading of 22.

The U.S. Department of Labor reported Thursday that initial jobless claims decreased 22,000 to a seasonally adjusted 222,000 for the week ended Oct. 13, beating forecasts of a 4,000 decrease.

That duo of upbeat economic reports eased selling pressure in the greenback which followed a surge in the euro as expectations that the European Central Bank will announce plans to taper monetary stimulus at a policy meeting next week overshadowed geopolitical uncertainty in the region.

Spain's central government said on Thursday it would suspend Catalonia's autonomy and impose direct rule after the Catalonia leader Carles Puigdemont threatened to push forward with a formal declaration of independence if Madrid refused to hold talks.

The euro recovered from an initial sell-off as market participants downplayed the impact of ongoing political unrest in Spain.

GBP/USD fell on the back of economic data showing retail sales growth fell in September as subdued wage growth continues to weigh on consumption