Trump announced Powell would become the chairman of the Federal Reserve when current Chair Janet Yellen steps down at the end of her term next year. The move had been mostly expected by investors.
Powell is seen by markets as a “continuity candidate” whose thinking is “very much allied to the status quo data-driven style at the Fed,” David de Garis, director of economics at National Australia Bank, said in a morning note.
Also on Thursday, House Republicans released details of a highly-anticipated tax-reform plan although market moves were relatively subdued. The corporate tax rate would be reduced to 20 percent from 35 percent under the plan, which also aims to lower the number of income tax brackets.
“Currency and stock markets have adopted a largely wait and see response both to news that Jerome Powell will be nominated as Fed Chair and to the release of US tax reform proposals,” Ric Spooner, chief market analyst at CMC Markets, said in a note.
Elsewhere, the Bank of England raised interest rates by 25 basis points on Thursday — its first time hiking rates in more than a decade. While policymakers voted seven to two to increase the benchmark rate to 0.5 percent, the move was seen as relatively dovish by markets.
In response, the British pound fell to trade as low as $1.3052, compared to levels around the $1.32 handle in the rest of the week. Sterling traded at $1.3055 at 6:42 a.m. HK/SIN.
