Dollar clings near three-month high against yen; focus on Fed guidance

© Reuters. Illustration photo of a U.S. five-dollar note

By Masayuki Kitano

SINGAPORE (Reuters) — The dollar held near a three-month high against the yen on Wednesday, supported by reports of Republican senators » favoring John Taylor to be the next head of the Federal Reserve, while the Aussie dollar weakened after the soft inflation data.

Taylor, a Stanford University economist, is considered to be someone who can.the Fed is on a path of faster rise in interest rates compared to current Fed chair Janet Yellen, whose term of office expires next February

The last dollar traded 113.77 yen by 0.1 percent on the day, but still in sight of the Assembly is the highlight of the 114.10 yen, the dollar was at its highest level since may 11. July.

«The market has started to price in a more hawkish Fed chair,» said Roy Teo, investment strategist at LGT Bank in Singapore.

US President, Donald Trump used to get a lunch with Senate Republicans on Tuesday to their views, he should get to the top of the Federal Reserve, according to the senators who participated.

A source familiar with the matter Trump the respondents said the Republicans, if you don’t prefer Taylor or the current Fed Governor Jerome Powell for the job.

More senators preferred Taylor over Powell, the source said. Trump also said he would consider reappointing Yellen, the source said.

The reports of support for Taylor as the next Fed chief, helped offset news of the Republican power struggles, which may obstruct the passage of the tax cut plan.

Two Republican senators on accused Trump of the devaluation of the US policy and the reputation of the country abroad, a rebellion that could Herald problems for his legislative agenda.

The Australian dollar fell to three-month lows after Australia’s September-quarter consumer price index came in under expectations of the market, so that investors see less chance of rises in Australian interest rates in the coming months.

The Australian dollar was last updated. 0.7 percent down on the day to $0.7720 , having touched a low of $0.7716 at one point, the weakest level since mid-July

Possible support for the Australian dollar is at the 200-day moving average at $0.7694, and a violation of this level could open the way for a test of the level of around $0.7600, said Teppei Ino, analyst at Bank of Tokyo-Mitsubishi UFJ in Singapore.

The Euro held steady at $1.1763 , with the short-term focus on the on Thursday, the European Central Bank to meet the policy.

According to a Reuters poll of economists, the ECB is expected to announce. Oct. 26, trimming the monthly asset purchases will begin to 40 billion euros from 60 billion euros in January.

Economists were divided on how long the ECB, the current is due to expire, an extension of the program beyond December, if that, and there was no clear view on whether or not it would program the open.

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