Dollar surges

TOKYO: The dollar edged up against its peers on Tuesday, supported by a rise in Treasury yields following a report that U.S. President Donald Trump was favouring a policy hawk as the next head of the Federal Reserve.

Treasury yields bounced from two-week lows and rose after a report on Monday that President Trump was favouring Stanford economist John Taylor, seen as more hawkish than current Chair Janet Yellen, to head the Fed.

“Taylor´s mention came as a surprise as he was lower on the list of rumoured Fed chief candidates including (Fed governor Jerome) Powell, (former Fed governor Kevin) Warsh, Yellen and (Trump´s top economic advisor Gary) Cohn,” said Shin Kadota, senior strategist at Barclays in Tokyo. “However, it is also being reported that Trump will meet Yellen on Thursday.

News regarding the Fed chairmanship is in constant flux and the market finds it hard to move significantly in either direction until some clarity is established.

“Trump will meet Yellen on Thursday as part of his search for a new candidate for her position, a source familiar with plans for the meeting said. The dollar index inched up 0.05 percent against a basket of six major currencies to 93.365 after rising 0.25 percent overnight.