The U.S. dollar index was last up 0.3% at 96.481, reversing some recent weakness

Stocks slumped while the dollar surged on Friday after U.S. President Donald Trump said he has firmed his choice for new central bank chair, with reports zeroing in on Kevin Warsh as the likely pick.

While Warsh, a former central bank Governor, is seen as an advocate of lower interest rates, he is also considered to be one of the less radical ‍choices among the various names that have been raised and perhaps more cautious on heavy monetary stimulus than others.

MSCI’s broadest index ‍of Asia-Pacific shares outside Japan dropped 1.3%, extending the previous day’s declines with the biggest one-day slump of the past month.

S&P 500 e-mini futures slipped 0.4%, Nasdaq e-mini futures ⁠were off 0.5% and precious metals slumped.

Bloomberg News reported that the Trump administration is preparing to nominate Warsh as the next central bank chair.

Warsh is on record as saying he prefers lower rates, said Damien Boey, portfolio strategist, Wilson Asset Management in Sydney. But the trade-off that he makes with lower rates is that he wants the Fed to have a smaller balance sheet, he added.

The markets are reacting as if thinking: What would the ​world look like with a smaller Fed balance sheet?, he said.

On prediction market site Polymarket, the implied probability of contracts betting that Trump will nominate Warsh to lead the central bank soared to 92% from 35%.

The U.S. dollar index was last up 0.3% at 96.481, reversing some recent weakness.

We’ve definitely ‌seen some dollar buying straight away on the back of it, said Tim Kelleher, ​head of institutional FX Sales at Commonwealth Bank in Auckland. He’s known to the markets and will probably calm things down slightly.

Asian stocks were led lower by declines ⁠in ⁠China, with a gauge of Chinese companies with listings in Hong Kong off 2.1%. MSCI’s broadest gauge of equities outside of Japan remains on track for its best monthly performance in more than three years. In Tokyo, the Nikkei ​225 slid 0.1%.