* Dollar edges away from three-month peak vs yen
* ECB meeting awaited as Catalonia situation pressures euro
By Lisa Twaronite
TOKYO, Oct 24 (Reuters) - The dollar edged down on Tuesday as attention turned to who would be the next head of the U.S. central bank.
U.S. President Donald Trump told reporters on Monday he is “very, very close” to deciding who should chair the Federal Reserve after interviewing five candidates for the position.
These include current Fed Chair Janet Yellen, whose term expires in February, as well as Fed Governor Jerome Powell, Stanford University economist John Taylor, Trump’s chief economic advisor Gary Cohn, and former Fed Governor Kevin Warsh.
Appointment of a more hawkish candidate would give the dollar a lift.
Investors are also following U.S. tax reform developments. The Senate’s approval of a budget resolution on Friday raised hopes that Trump’s tax plans would move forward this year.
The dollar index, which tracks the greenback against a basket of six major rivals, edged down 0.1 percent to 93.817 .
The dollar inched 0.1 percent lower to 113.36 yen, pulling away from a three-month high of 114.10 yen hit in the wake of Sunday’s general election in Japan.
Prime Minister Shinzo Abe’s coalition scored a decisive victory, reassuring investors that his “Abenomics” economic reforms would continue, including the Bank of Japan’s yen-weakening easy monetary policy.
“The risk-on sentiment has stalled for now,” Masashi Murata, senior currency strategist at Brown Brothers Harriman in Tokyo.
“The Japanese election result was not so surprising, and was mostly priced in,” he said.
The euro added 0.1 percent to $1.1754, as investors awaited the European Central Bank’s policy meeting on Thursday.
The ECB is expected to signal that it will take small steps away from its ultra-easy monetary policy stance.
Catalonia’s separatist crisis continued to pressure the euro. Madrid has invoked special constitutional powers to dismiss the Catalonian regional government and force elections, to counter the independence movement.
A vote in the national Senate to implement direct rule on Catalonia is due on Friday. (Reporting by Lisa Twaronite; Editing by Eric Meijer)