The dollar index climbed toward 97.7 on the first trading day of February, its highest level in more than a week, extending gains of over 0.7% from the previous session. The greenback rebounded after a losing January, as US President Donald Trump’s nomination of Kevin Warsh as the next Fed chair injected fresh uncertainty into the outlook for monetary policy. Markets view Warsh as a more hawkish pick who would favour lower interest rates, albeit less aggressively than some other potential candidates. He is also expected to rein in the Fed’s balance sheet, a move that typically supports the dollar by reducing liquidity in the financial system. The dollar also drew support from stronger-than-expected US data, with the ISM manufacturing PMI unexpectedly rising to its highest level since 2022 in January. The greenback strengthened against the Japanese yen and also gained against the Swiss franc, the Canadian dollar and the euro.