Dollar Rises on Warsh Speculation, Month-End Flows
The dollar and Treasury yields jumped on the prospect of President Donald Trump nominating Kevin Warsh as the next Federal Reserve chair.
The Bloomberg Dollar Spot Index rises as much as 0.6%, trimming its weekly decline to 0.8%; it’s down 1.7% on a monthly basis.
10-year Treasury yields climb as much as five basis points to 4.28% before paring the advance.
The odds of Warsh being nominated have jumped to 94% on prediction-market platform Polymarket.
Spot volumes run at around 80% of recent averages while options volumes picked up later into the day, two Europe-based traders say; month-end flows also make for choppy price action, they say.
Gold and silver suffered the biggest selloff in years, in a whipsawing reversal of a scorching rally that’s lifted prices to all-time highs.
EUR/USD drops 0.6% to 1.1895 before halving losses; data showed that the euro-area economy grew more than expected at the end of last year.
The euro is up 1.6% this month, the most since Aug.
USD/JPY rises 0.8% to 154.03, versus 154.39 day high; monthly figures released Friday by the Finance Ministry confirmed that Japan didn’t spend any money on direct intervention to bolster the yen in the four weeks up to Jan. 28.
Tokyo inflation excluding fresh food slowed to 2% y/y this month from 2.3% in December.
AUD/USD slides 0.6% to 0.7009 following a nine-day rally; traders are ramping up bullish Australian dollar bets in the options market as conviction grows for the Reserve Bank of Australia to raise interest rates on Tuesday.
Source : Bloomberg.com
