Federal Reserve Board Governor Jerome Powell, who has voted to support Fed Chair Janet Yellen’s low interest rate policies, may not be as negative for the US dollar in the long term as originally thought, investors and analysts said on Thursday. Earlier on Thursday President Donald Trump tapped Fed Governor Jerome Powell to become head of the US central bank, breaking with precedent by denying Janet Yellen a second term but signalling a continuation of her cautious monetary policies. Financial markets have typically viewed Powell as bearish for the dollar because he has supported gradual interest rate rises, rather than more aggressive moves. The dollar has consequently sold off on reports that he will be the next chair. However, some believe that Powell would be a net positive for the greenback. “The dollar is more likely to turn up under Powell because the economic trajectory in the US is going up,” said Richard Benson, managing director and co-head of portfolio investments at Millennium Global in London. Some candidates that had been floated as potential chairs had more hawkish views on monetary policy, indicating a more aggressive pace of interest rate increases which could have benefited the dollar more. Still, Powell’s nomination by President Donald Trump ensures continuity in the Fed’s monetary policy. That should mean the Fed is on track to raise interest rates multiple times and that the unwinding of the balance sheet remains on track. Higher interest rates boost the yield of dollar assets, making them more attractive to investors. In the same vein, shrinking the Fed’s balance sheet, by not re-investing the proceeds of its earlier bond purchases as they mature, is also good for the dollar because it means lower bond purchases by the US central bank.