Trump eyes early Fed chair pick
US President Donald Trump may name a successor to Fed Chair Jerome Powell as early as this summer, according to the Wall Street Journal, citing people familiar with the matter.
Insiders say Trump is considering Treasury Secretary Scott Bessent, former Fed Governor Kevin Warsh, and National Economic Council Director Kevin Hassett.
The decision could come as soon as September or October, nearly a year before Powell’s term ends in May.
Other potential candidates include Fed Governor Christopher Waller and former World Bank President David Malpass.
Choosing a replacement this early would break from the usual three- to four-month transition period.
The US dollar index fell sharply on the news, hitting new three-year lows.
USD tumbles in Asia; USD/SGD at decade lows
Meanwhile, the AUD/USD is holding steady above 0.6500, buoyed by broader risk appetite. The pair gained 0.5%.
Rising commodity prices are also supporting the Aussie, with copper nearing a three-month high overnight.
The kiwi was also stronger, with NZD/USD up 0.3%.
In Asian FX, the Singapore dollar strengthened sharply, pushing USD/SGD to a ten-year low.
With the pair sitting at the bottom of its recent 30-day trading range and the next resistance near the 21-day EMA of 1.2849, some USD buyers may see an opportunity to step in.
Euro, pound strengthen
The euro and British pound also gained overnight, with EUR/USD up 0.4% and GBP/USD up 0.5%.
The GBP has been caught between two key factors, but for now, the more positive case is winning.
Speculation around the likely new Fed chair has weakened the U.S. dollar, as markets anticipate a more dovish appointee.
On the other hand, Bank of England Governor Andrew Bailey sounded more inclined to cut local interest rates during Thursday’s British Chambers of Commerce Global Annual Conference.
Bailey said there is now stronger evidence of “slack” in the UK economy and noted that data suggests a significant decline in wage growth is coming.
Financial markets have become more convinced the BoE will cut rates, with the probability of a 7 August rate cut rising from 72% to 84% over the past two weeks (source: Bloomberg).
The strengthening of European currencies saw AUD/EUR and AUD/GBP both near two-month lows yesterday.
Aussie at seven-month highs
Table: seven-day rolling currency trends and trading ranges
Key global risk events
Calendar: 23 – 28 June
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*The FX rates published are provided by Convera’s Market Insights team for research purposes only. The rates have a unique source and may not align to any live exchange rates quoted on other sites. They are not an indication of actual buy/sell rates, or a financial offer.
