Wednesday, October 24, 2018

© Reuters.  Dollar steady; sterling, kiwi under pressure© Reuters. Dollar steady; sterling, kiwi under pressure – The dollar was trading near two-week highs against a basket of the other major currencies on Tuesday as investors remained focused on who will be the next chairman of the Federal Reserve.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was at 93.77 by 09:01 AM ET (01:01 PM GMT).

President Donald Trump told reporters on Monday he is “very, very close” to deciding who should lead the Fed after interviewing five candidates for the position.

They include current Fed Chair Janet Yellen, whose term expires in February, as well as Fed Governor Jerome Powell, Stanford University economist John Taylor, Trump’s chief economic advisor Gary Cohn, and former Fed Governor Kevin Warsh.

The dollar was higher against the yen, USD/JPY rising 0.39% to 113.87, re-approaching Monday’s more than three month highs of 114.09.

The dollar was boosted on Monday by expectations for U.S tax reforms after President Trump said Sunday that he was optimistic Congress would pass a tax plan he could sign by year’s end.

The euro was a touch higher, with EUR/USD last at 1.1760.

Data on Tuesday showed that euro zone private sector activity slowed slightly in October, but continued to expand at a steady pace.

Sterling was lower, with GBP/USD down 0.2% to 1.3169 after Bank of England Deputy Governor Sir Jon Cunliffe warned that with UK economy suffering weak growth it is an “open question” whether the bank will raise borrowing costs in November.

Elsewhere, the New Zealand dollar fell to the lowest levels in five months, with NZD/USD down 0.76% to 0.6913.

The kiwi has weakened broadly in recent sessions amid fears that a slowdown in foreign investment under the incoming Labor coalition government could hit growth and prompt the Reserve Bank of New Zealand to keep rates at current record lows for longer.

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