FOREX-Likely new Fed chief boosts dollar

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Trump to announce Fed Chair nominee, Warsh considered

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Dollar index rises 0.4%, trims weekly decline to 0.9%

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Trump endorses spending deal to avoid government shutdown

(Updates with early European trading)

By Rocky Swift and Alun John

TOKYO/LONDON, Jan 30 (Reuters) - The dollar rose on Friday, clawing back some of its slide on the week, after U.S. President Donald Trump said he would soon announce his nominee to head the Federal Reserve, with reports pointing to Kevin Warsh as the likely pick.

The euro ?was last down 0.3% at $1.1932, sterling was off 0.4% at $1.3765, while the dollar climbed 0.5% on the Japanese yen to 153.88 yen.

That all left the dollar index, which tracks the currency against ?six peers 0.37% higher at 96.48.

Trump said he intends to name his choice to replace Fed Chair Jerome Powell on Friday.

Bloomberg News ?said Warsh would get the nod to replace Powell at the Fed, while a person familiar ?with the matter told Reuters he ?met Trump at the White House on Thursday.

The dollar rising is "an understandable reaction as this would confirm who the next Fed Chair will not be - Kevin Hassett or Rick Rieder," ?said Derek Halpenny MUFG's head of research, global Markets EMEA.

"Both of these candidates ?have been in the running and were deemed favourites at different stages and were perceived by the markets as being inexperienced and being too close to President Trump and hence would be more easily influenced."

He said this "is certainly ?not the case with Kevin Warsh".

The dollar also received a ?lift after Republican ?and Democratic lawmakers hammered out a deal to stave off a looming government shutdown.

In combination, that has helped the currency stabilise after escalating conflict abroad and unease over domestic immigration crackdowns have hammered the U.S. currency this month.

The dollar index hit a ?four-year low earlier this week.

POSITIONS LIGHTENING INTO WEEKEND

Nonetheless there is no sign of newsflow slowing.

With tension simmering in Iran, Trump said on Thursday he planned to speak with leaders in Tehran, even as the U.S. dispatched another warship to the Middle East and Pentagon chief Pete Hegseth said the military would be ready to carry out whatever the president decided.

The White House also said Trump signed an executive order for tariffs on countries that provide oil to Cuba, while he threatened new tariffs on Canada and said the United States was decertifying business ?jets made ?there.

"Any sensible market participant would not want to carry a big position into the weekend," said Khoon Goh, head of Asia research for ANZ in Singapore. "So some of this could just be positioning lightening up. If you're short dollars, you've done well, ?take your chips off the table."

Moves have not just been on the dollar side of the equation.

While the Japanese yen may be softer on the day, it is still poised for its second straight weekly gain, after Japanese policymakers hinted at possible coordinated currency market intervention with the United States to defend the currency.

The yen fell to a near 18-month low last week as concerns about Japan's finances mounted before a snap election in which Prime Minister Sanae Takaichi and her opponents are campaigning on a plank of tax cuts.

The dollar also climbed on the safe haven Swiss franc, up 0.5% to 0.768 ?francs

The Swiss currency has been a major beneficiary of recent economic and geopolitical uncertainty, trading around its strongest since January 2015, when the SNB abandoned its exchange rate cap, sending the franc up as much as 30%.

The Australian dollar weakened 0.6% versus the greenback to $0.7008.

In cryptocurrencies, bitcoin tumbled 2.2% to $82,100, touching the weakest since November 21, while ether declined 3% ?to $2,732.04.

(Reporting by Rocky Swift in Tokyo, Rae Wee in Singapore and Alun John in London; Editing by Sam Holmes and Clarence Fernandez, William Maclean)