Dollar step back from a 1-1/2-month high

The dollar stepped back from a 1-1/2-month high on Wednesday on speculation that Trump’s choice for the next Fed chair could be a less hawkish candidate than some had expected.

The dollar had rallied earlier this week against a basket of currencies on speculation that Warsh might be the leading candidate to replace Yellen, and got an extra boost from strong US data.

The dollar index, which tracks the greenback against a basket of six major rivals, slipped 0.2 per cent to 93.433 , off a six-week high of 93.92 touched on Tuesday following strong US manufacturing figures.

Dollar money market futures were pricing in about a 70 per cent chance of a rate hike by December.

The euro traded at $1.1764, up 0.2 per cent on the day and off Tuesday’s 1 1/2-month low of $1.16955.

The common currency has been also dogged by concerns over political and social turmoil in Catalonia.

The dollar’s rally against the yen has also stalled, with the US currency unable to clear resistance around 113.25 yen in the past week. The dollar dipped 0.2 per cent to 112.64 yen.

The British pound edged 0.2 per cent higher to $1.3259, but was still down 1.0 per cent so far this week.

The Australian dollar bounced back slightly from Tuesday’s three-month low. The Aussie fetched $0.7856, up 0.2 per cent on the day and off Tuesday’s low of $0.7785, reports Reuters.