US Dollar Falls Ahead of Fed Chair Jerome Powell’s Speech
The US dollar fell against its major trading partners on Friday as attention turned to Federal Reserve Chairman Jerome Powell’s keynote address at the Jackson Hole Symposium. In the past, Fed leaders have used this opportunity to indicate shifts in monetary policy.
Given the recently soft employment data, supplemented by projected downward benchmark revisions, market participants are looking for hints from Powell that the Federal Open Market Committee will cut rates by at least 25 basis points from the current 5.25% to 5.50% federal funds target range at their Sept. 17-18 meeting.
Other Fed officials are expected to speak throughout the day on the TV networks. Comment on Thursday varied among officials, with some indicating a rate reduction at the September meeting was a near certainty and others suggesting it will depend on the outcome of data releases over the next month.
New home sales data for July are due to be released at 10:00 am ET, followed by the Kansas City Fed’s services reading for August. The St. Louis Fed is expected to update its gross domestic product nowcast estimate around midday.
A quick summary of foreign exchange activity heading into Friday showed that USDEUR rose to 1.1118 from 1.1107 at the Thursday US close but was below a level of 1.1137 at the same time Thursday morning. There are no Eurozone data on Friday’s schedule. The next European Central Bank meeting is scheduled for Sept. 12.
GBPUSD rose to 1.3118 from 1.3083 at the Thursday US close but was below a level of 1.3121 at the same time Thursday morning. There are no UK data on Friday’s schedule, but Bank of England Governor Andrew Bailey is due to speak at 11:00 am ET and then again at 3:00 pm ET. The next BoE meeting is scheduled for Sept. 19.
USDJPY fell to 146.0718 from 146.3093 at the Thursday US close but is above a level of 145.8223 at the same time Thursday morning. Japanese consumer prices rose only slightly in July from June, while the year-over-year was in line with the previous month.
However, the year-over-year core rate accelerated modestly, according to data released overnight. The next Bank of Japan meeting is scheduled for Sept. 19-20. BoJ Governor Kazuo Ueda said overnight that the BoJ is prepared to raise interest rates further if the economy and prices evolve as expected.
USDCAD fell to 1.3586 from 1.3612 at the Thursday US close but was above a level of 1.3581 at the same time Thursday morning. Canadian data on retail sales for June and manufacturing sales for July are due for release. The next Bank of Canada meeting is scheduled for Sept. 4. #US Dollar Falls Ahead of Fed Chair Jerome Powell’s Speech U.S. Govt. Announces $27m Humanitarian Aid for Nigeria
