The pound briefly hit its highest level against the dollar for almost four years after markets were unnerved by a report that US President Donald Trump could bring forward the naming of the new head of the US central bank.

A report that President Donald Trump may announce a replacement for Federal Reserve Chair Jerome Powell by September or October pushed down the US dollar as investors saw it as a sign that early rate cuts were becoming more likely.

Trump is reportedly weighing a slate of candidates to take over Jerome Powell's job and could announce a replacement long before Powell's term is over.