US Dollar Gains Ground for Third Day on Manufacturing Rebound and Fed Nomination

The US USdollar climbed for a third consecutive day as market participants reacted to a combination of resilient economic data and a major shift in the leadership outlook for the Federal Reserve. The dollar index was last recorded at 97.62, extending a significant two-day advance of 1.5 percent. This upward momentum weighed on other major currencies, with the euro last trading at $1.1791 as global foreign exchange markets adjusted to the strengthening greenback.

A primary driver for the currency strength was the nomination of Kevin Warsh kevin warshas the next chief of the Federal Reserve. Markets broadly expect Kevin Warshto be less likely to press for rapid interest rate cuts compared to other potential candidates. Lee Hardman lee hardman, an analyst at MUFG, noted that the nomination by President Donald Trump donald trumpsignalled that the administration was not seeking to diminish the power of the central bank. Lee Hardmanadded that Kevin Warshwould likely support lower rates at least initially. Market observer Matthew Ryan matthew ryanalso noted the shifting sentiment as investors adjusted their portfolios in light of the news.