Market News
Dollar steady after Friday rally as investors weigh a Warsh-led Fed, commodity-linked currencies soft
By Samuel Indyk and Rae Wee
LONDON, Feb 2 (Reuters) - The dollar clung on to gains on Monday as investors weighed what a Federal Reserve under Kevin Warsh might look like, while plunging precious metals and oil prices weighed on commodity-linked currencies.
The slide in commodities spilled over into equity markets in Asia and Europe, marking a nervous start to the week filled with central bank meetings and top-tier economic data, as well as an election in Japan.
The yen was back on traders' radars, after Japanese Prime Minister Sanae Takaichi over the weekend talked up the benefits of a weaker yen in a campaign speech, in a tone at odds with her finance ministry which has worked to stem the currency's declines.
The dollar was flat in Europe after a rally on Friday sparked by U.S. President Donald Trump's pick of Warsh as the next Fed chair. Analysts assume Warsh will be less likely to press for all-out rapid rate cuts than some other candidates who had been in the running, though he has sounded more dovish than current chair Jerome Powell.
Against a basket of currencies, the dollar was last at 97.21, little changed after Friday's 1% gain.
"Kevin Warsh is, on the surface, the most dollar-bullish option that Trump could have picked," said Mohamad Al-Saraf, FX and fixed income associate at Danske Bank.
