USD: dollar holds strong following speculation of a new Federal Reserve Chair

The US dollar held onto its gains yesterday and settled at a one-week high against the euro after reports emerged that Donald Trump is leaning towards picking a hawk as the next Federal Reserve Chair. John Taylor is being touted as the next head and it is known he is keen on raising US interest rates. In addition, industrial production for September fell in line with expectations by rising 0.3% compared to a slide of 0.7% in August.

Having been knocked by a stronger dollar, the euro slipped 0.3% which means it has weakened by almost 3% since hitting a two and a half year high last month. The single currency barely reacted to the release of the German ZEW economic sentiment which came in below expectations.

All in all it was a quiet day for US economic data, as attention was mainly focused on the UK and eurozone. However, today sees the release of building permits and crude oil inventories.