FX Traders see a stronger dollar post Jackson Hole symposium despite weaker economic data

FX Traders see a stronger dollar post Jackson Hole symposium despite weaker economic data

The FX markets are in a wait-and-see mode ahead of the Federal Reserve's virtual Jackson Hole symposium which starts tomorrow and culminates with a Jerome Powell speech on Friday. A third day of stronger oil prices could not help the Canadian dollar as most all currencies sold off relative to the US dollar – including other safe-haven currencies.

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    August 25, 2021

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  • USD

    The US dollar gained despite Durable Goods orders for July being interpreted as worse than expected. Investors are betting that weaker data will lead the Federal Reserve to hold off on tapering/rate hikes.


    The British pound is weaker vs. the US dollar as financial markets await Fed Chairman Jerome Powell’s speech on Friday. Wages in the UK have been rising and investors anticipate the Bank of England will begin to sound more hawkish in upcoming speeches and meetings and in turn help support the pound.


    The euro is poised to again rely on the 1.17 support level as the dollar marches higher. Despite economic data expected to show the eurozone economy outpacing the US in Q3, the euro remains under pressure.


    A third day of higher oil prices could not stop the Canadian dollar from weakening. FX markets are favoring the US dollar over most all currencies – especially in front of Jerome Powell's speech this Friday.


    The Chinese renminbi is flat this morning after gaining on the US dollar the past two days. The RMB is trading in a range between 6.45 and 6.5 with FX markets watching closely the two central banks. The renminbi may be under pressure if the Fed signals tapering/rate increases sooner than expected.

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Peter Compton
Peter Compton

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