Dollar strengthens

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TOKYO: The dollar held an upper hand against other major currencies on Wednesday as investors weigh the possibility that U.S. President Donald Trump will choose a more hawkish Federal Reserve chief with than the current chair, Janet Yellen.

The dollar index stood at 93.475, extending its rebound from Friday´s 2 1/2-week low of 92.749. It rose as high as 93.729 on Tuesday.

With the Federal Reserve expected to raise interest rates for the third time this year in December, markets are now looking to who will lead the Federal Reserve after Yellen´s term expires next February.

Trump has a pool of five candidates to choose from for the next chair of the Federal Reserve and is likely to announce his choice before going to Asia in early November, a source familiar with the situation said on Tuesday.

"Who will be the next Fed Governor is the most important focus of the market now," said Yukio Ishizuki, senior strategist at Daiwa Securities. "But whoever it will be, the Fed is going to continue policy normalisation and U.S. interest rates will be higher next year," he added. The dollar got an extra boost this week after Stanford University economist John Taylor emerged as a major candidate.