US Dollar Recovers as Trump Nears Fed Nomination Announcement

The dollar rose on Friday, partially reversing its weekly decline following US President Donald Trump’s announcement of his intention to name a nominee to head the Federal Reserve in the coming days. Optimism that Washington will avoid a government shutdown added further support. Reports suggested former Fed Governor Kevin Warsh had visited the White House, leading some experts to believe the incoming appointee might not be beholden to Trump’s wishes.

In Japan, data indicated slowing inflation but matched the central bank’s target. The greenback gained slightly against the Swiss franc, strengthening 0.7% to $0.7699. Meanwhile, the euro weakened 0.4%, dropping to $1.1916 per dollar, and the yen depreciated by 0.42% to $153.77.

A source familiar with the matter reported that Trump’s meeting with former Fed Governor Kevin Warsh at the White House on Thursday was positive for the incoming appointee’s prospects. The same day, Trump signed an executive order imposing tariffs on countries providing oil to Cuba. This action pushed up oil prices and pressured the dollar.

In contrast, the dollar weakened against the euro by 0.4% to $1.1916 and the pound fell 0.32% to $1.3759. The U.S. domestic situation improved somewhat as Trump endorsed a bipartisan spending deal that could prevent a government shutdown. However, this was tempered by concerns over US policy toward Greenland.

The dollar’s slide had previously been precipitated by its four-year low in early week trading. This drop, driven by fears about U.S. policies and the Federal Reserve’s decision to keep interest rates unchanged, ended last week with its biggest fall since April. The Japanese yen strengthened slightly from levels around 152-154 per dollar.

Core consumer prices in Tokyo increased 2% year-on-year in January, though this matched the central bank’s target and slowed from December. Cryptocurrencies experienced sharp declines as well: Bitcoin shed 3.3% to $81,619.01, while ether lost 3.4% to $2,719.87.