Investing.com – The dollar gained in Asia on Friday with the euro and the pound down on concerns over Brexit and as the markets looked for signs President Donald Trump may soon name the next Fed chief.
USD/JPY changed hands at 113.26, up 0.64%, while AUD/USD traded at 0.7838, down 0.52%. EUR/USD dropped 0.34% to 1.1812 and GBP/USD eased 0.36% to 1.3112.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, jumped 0.35% to 93.34.
Reports suggest British Prime Minister Theresa May is foundering in talks with EU leaders and her own party inc rafting the country’s exit from the European Union, though she did receive a good word from German Chancellor Angela Merkel.
“In contrast to how it is portrayed in the British press, my impression is that these talks are moving forward step by step,” Merkel told reporters, dismissing suggestions from some in Britain that the talks should be broken off as “absurd.”
Overnight, the dollar fell sharply, adding to earlier losses, following a drop in bond yields after a report suggested that Federal Reserve Governor Jerome Powell is leading the race to succeed Janet Yellen as next Fed Chairman.
Powell is the front runner to become the chair of the U.S. central bank after President Donald Trump concluded a series of meetings with five finalists Thursday, three administration officials said, according Politico report published Thursday.
Powell is widely viewed as the least hawkish candidate – apart from Yellen – compared to his peers on the shortlist to head the Federal Reserve in February.
On Thursday, the dollar eased from session lows against a basket of major currencies after better-than-expected economic data on manufacturing and jobs lifted sentiment on the U.S. economy.
The Philadelphia Fed said Thursday its manufacturing index rose to a reading of 27.9 this month, from 23.8 in September, beating economists forecast of a reading of 22.
The U.S. Department of Labor reported Thursday that initial jobless claims decreased 22,000 to a seasonally adjusted 222,000 for the week ended Oct. 13, beating forecasts of a 4,000 decrease.
That duo of upbeat economic reports eased selling pressure in the greenback which followed a surge in the euro as expectations that the European Central Bank will announce plans to taper monetary stimulus at a policy meeting next week overshadowed geopolitical uncertainty in the region.
Spain’s central government said on Thursday it would suspend Catalonia’s autonomy and impose direct rule after the Catalonia leader Carles Puigdemont threatened to push forward with a formal declaration of independence if Madrid refused to hold talks.
The euro recovered from an initial sell-off as market participants downplayed the impact of ongoing political unrest in Spain.
GBP/USD fell on the back of economic data showing retail sales growth fell in September as subdued wage growth continues to weigh on consumption.