Dollar retreats on talk of less hawkish Fed chief

London

The greenback had reached its highest since mid-August against a basket of major currencies on Tuesday, driven by stronger economic data, as well as expectations for another Fed rate hike by the end of the year and a revival of the so-called "Trumpflation trade".

But it fell across the board on Wednesday, with investors concerned that the Fed might be set to take a more dovish turn after a Politico report that Fed Governor Jerome Powell is favoured over former governor Kevin Warsh by Treasury Secretary Steven Mnuchin. While both are seen as serious candidates to replace current chief Janet Yellen when her term expires in February, Mr Powell is seen as more dovish than Mr Warsh, who has criticised the Fed's bond-buying programme in the past.