TOKYO/LONDON, Jan 30 – The U.S. dollar pared some of its initial advances on Friday but stayed elevated overall following President Donald Trump’s decision to appoint former Federal Reserve Governor Kevin Warsh as the new chair of the central bank.
Currency Market Movements
The euro declined by 0.2 percent to $1.1947, while the British pound fell 0.3 percent to $1.378. Meanwhile, the dollar rose 0.5 percent against the Japanese yen, reaching 153.8 yen. This performance pushed the dollar index, which gauges the currency against a basket of six major peers, up 0.2 percent to 96.47.
Earlier reports of Trump’s plan to select Warsh had already bolstered the dollar, with the index climbing about 0.5 percent at one point during the session.
Market Reactions and Analysis
The dollar’s upward movement reflects a logical response, as it clarifies that the next Fed chair will not be Kevin Hassett or Rick Rieder, according to Derek Halpenny, head of research for Global Markets EMEA at MUFG.
Halpenny noted that both Hassett and Rieder had been considered frontrunners at various times and were viewed by investors as lacking experience while being overly aligned with President Trump, potentially making them susceptible to influence. In contrast, he emphasized that this does not apply to Kevin Warsh.
