Dollar steadies ahead of NFP

SINGAPORE (Reuters) – The dollar held steady versus a basket of currencies on Friday, as focus shifted to U.S. jobs data, with President Donald Trump’s nomination of Federal Reserve Governor Jerome Powell to be the next Fed chair coming as no surprise.

Trump on Thursday tapped Powell to lead the U.S. central bank, breaking with precedent by denying incumbent Janet Yellen a second term but signaling a continuation of her cautious monetary policies.

Trump’s decision was in line with what market participants had been expecting, and the dollar showed limited reaction after the news.

The dollar index last stood at 94.696 .DXY, having pulled up from a one-week low of 94.411 set on Thursday.

The greenback had slipped on Thursday after Republicans in the U.S. House of Representatives released proposals to overhaul the tax code.

Republicans called for slashing the corporate tax rate to 20 percent from 35 percent, cutting tax rates on companies’ foreign profits and on individuals and families. Congressional passage of the legislation, however, was far from certain.

While the contents of the tax reforms seem positive for the dollar, there is still uncertainty over how quickly it can be implemented, said Stephen Innes, head of trading in Asia-Pacific for Oanda in Singapore.

“This could be quite a drawn out process,” Innes said, adding that U.S. jobs data due later on Friday, would be a near-term focus for the dollar.

Against the yen, the dollar eased 0.1 percent to 113.94 yen JPY=, trading below a 3-1/2 month high of 114.45 yen that had been set last Friday. The euro held steady at $1.1659 EUR=.

Reuters

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Stephen Innes

Stephen Innes

Head of Trading APAC at OANDA
Stephen has over 25 years of experience in the financial markets and currently based in Singapore as the Head of Trading Asia Pacific with OANDA. Stephen's market views focus on the movement of G-10 and ASEAN Currencies. His views appear in Bloomberg, CNBC.Reuters, New York Times WSJ and the Economist. His media appearances include Bloomberg TV & Radio, BBC International, Sky TV, Channel News Asia, ASTRO AWANI and BFM Malaysia. Stephen has an extensive trading experience in Spot and Forward FX, Currency and Interest Rate Futures, Money Market Derivatives and Precious Metals. Before joining OANDA, he worked with organisations like Nat West, Chemical Bank, Garvin Guy Butler, and Sumitomo Mitsui Banking Corporation. Stephen was born in Glasgow, Scotland, and holds a Degree in Economics from the University of Western Ontario.
Stephen Innes