Danske Bank: Dollar short-term risks tilt higher after Powell nomination.

Danske Bank's Stefan Mellin stated in a report that after Trump nominated Powell as the chairman of the Federal Reserve, the short-term risk balance has shifted in favor of a stronger dollar. The nomination seems to alleviate concerns in the market about the independence of the Federal Reserve being threatened and has caused some of the political risk premium that was previously in the dollar to unwind. He pointed out that the selling pressure on the dollar at the end of January was mainly due to the political risks caused by the unpredictability of US policy. Therefore, the relaxation of short-term political uncertainty may "restore the correlation between the dollar and fundamentals, and create a tactical window for a dollar rebound."