US dollar drops as Summers pulls out of race for Fed job

Published: 16 Sep at 9 AM Tags: Euro, Dollar,

The US dollar is down against a number of other major currencies to its lowest level in nearly four weeks. The slide came after Lawrence Summers confirmed that he would no longer be in the running for next chairman of the Federal Reserve.

His departure from the race for the central bank’s top position means it is more likely that Janet Yellen will get the job.

The dollar dropped 0.5 per cent and is also under pressure because the Fed has indicated that it will only be scaling back its massive $85 billion per month bond-buying programme by around $10 billion. Most analysts believe that if Summers had taken over as Fed chairman, the withdrawal from an easy money policy would have been sharper.

The greenback initially slid from 99.30 yen to 98.45 yen before recovering a tad to 98.88 yen. The euro is up against the dollar to $1.3366 from $1.3300. The US currency has also dropped against the New Zealand and Australian dollars. The kiwi is currently up to $0.8234, its highest level since the middle of May and the Aussie is up 0.5 cents to $0.9370.

Because President Obama accepted Summers’ decision on Sunday, the full effect on the markets remains to be seen.


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