The dollar could fall if Federal Reserve Chair nominee Kevin Warsh leans in
favor of interest rate cuts in his Senate hearing later, ING's Chris Turner says
in a note. "With oil prices and short-term inflation expectations high at the
moment, comments which see short-dated swap rates and real rates [adjusted for
inflation] come lower will be dollar negative." Any dollar reaction is unlikely
to be significant, however, as Republican Senator Thom Tillis could prevent the
Warsh nomination from proceeding to a full vote in the Senate amid an
investigation into the Fed's reconstruction project, he says.
