The dollar rose after a new chairman was nominated to head the Federal Reserve
The dollar rose on Friday after U.S. President Donald Trump nominated former Federal Reserve member Kevin Warsh to be the next chairman of the Fed, as the U.S. currency recovered from a sharp sell-off earlier in the week.The dollar index, which measures the performance of the US currency against a basket of currencies including the yen and the euro, rose 0.79 percent to 96.93 points, while the euro fell 0.79 percent to $1.1874.It appears that companies have passed on the increased costs resulting from import tariffs to consumerThe yen fell 0.89 percent against the US dollar to 154.49, but the dollar is still on track for a weekly loss of 0.8 percent against the Japanese currency.The dollar extended its gains after data showed US producer prices rose more than expected in December
The dollar is rising
What’s happening:
The US dollar recorded gains on Friday after Kevin Warsh was named as the next Federal Reserve Chairman.
What happened:
US President Donald Trump nominated former Federal Reserve Governor Kevin Warsh to succeed Jerome Powell.
Meanwhile, the White House and Democrats reached a spending deal to prevent another US government shutdown.
The US dollar rose after Worsch was named the next Federal Reserve chairman
Why it matters:
President Donald Trump selected Kevin Warsh to head the Federal Reserve with Jerome Powell’s term scheduled to end in May. Warsh is expected to support interest rate cuts, although his approach could be less aggressive than other potential nominees. Nonetheless, the change in the Fed chief triggered concerns around the independence of the Federal Reserve.
Last week, the Fed kept its benchmark interest rates unchanged, under Jerome Powell’s watch, with him describing the US economy as “solid”. Markets now widely expect at least one interest rate cut in June and another later in the year.
Data released on Friday provided a further boost to the US dollar. US producer prices rose more than expected in December, as businesses looked to pass on rising costs from import tariffs. US producer prices surged 0.5% in December, the biggest rise in three months, following a 0.2% gain in November. The December figure came in higher than market expectations of 0.2%.
The US dollar index, which measures the greenback’s performance versus a basket of major peers, jumped 0.9% on Friday. The index extended gains this morning, rising by around 0.1%.
The greenback declined around 2% in January, recording its weakest monthly performance since June 2025, amid geopolitical concerns and tariff-related news.
The USD/JPY rose on Friday, after falling for most of last week.
US dollar rises
What to watch:
Investors will continue monitoring geopolitical concerns with mounting tensions between the US and Iran. Trump has indicated that he is ready for negotiations with Iran.
Data on S&P Global Manufacturing PMI (1845 UAE Time) and ISM Manufacturing PMI (1900 UAE Time) will be released today. Analysts expect the S&P Global manufacturing PMI to rise to 51.9 in January from 51.8 in December. The ISM manufacturing PMI, which declined for a third straight to 47.9 in December, is expected to rise to 48.3 in January