Lael Brainard, a member of the Fed’s board and a prominent candidate for the position, will serve as Vice President, the White House reported.
“Powell’s nomination for a second term suggests a less cautious outlook for monetary policy than under potential Brainard leadership.”said Joe Manimbo, a market analyst at Western Union Business Solutions in Washington.
“There seems to be more room for rate hikes in the US with Powell as Fed chairman, and that has been broadly positive for the dollar.”added.
The dollar index, which compares the greenback with a basket of six prominent currencies, was up 0.27% to 96.29 units, its highest since July 2020. The euro was down 0.46% to $ 1.1248, its lowest since the same date.
The mainland currency already fell earlier in the session, as concerns mounted about new Covid-19 restrictions in Europe, with Austria entering another total lockdown and Germany evaluating doing the same.
“It has been a double blow for the euro. One has been an increase in cases across the bloc, which is reinforcing the decidedly cautious outlook on (European Central Bank) policy in stark contrast to the Fed, where pressure is mounting. for the US central bank to adopt a faster pace of normalization “, Manimbo stated.
The Fed will release the minutes of its Nov. 2-3 meeting on Wednesday, which will be evaluated for further signs that Fed officials are increasingly concerned about stubbornly high inflation.