Traders anxiously await Fed Chairman Powell’s comments at central bank summit
Kathryn Garvey " | August 22, 2019
Major currencies are mixed and trading volume is light as the world awaits news out of Jackson Hole. Positive comments from Europe increased optimism for a soft Brexit and the euro failed to hold onto gains after positive PMI data.
August 22, 2019
EUR/USD 1.1083 GBP/USD 1.2161 USD/CAD 1.3286 AUD/USD 0.6766 USD/JPY 106.57 USD/CNH 7.0863 USD/ILS 3.5251 USD/MXN 19.7326 USD/CHF 0.9838 USD/INR 71.8163
All eyes are on Jackson Hole ahead of the Fed Chairman Jerome Powell’s remarks slated for tomorrow. G10 currency movements are muted as markets await the tone of the comments. Yesterday afternoon saw the release of FOMC minutes which were mildly less dovish than expected giving the dollar a brief boost.GBP
The pound popped slightly after French President Emmanuel Macron gave optimistic comments on Brexit saying said he is “confident” they could find “something intelligent” on Brexit talks in the next 30 days. Specifically, Angela Merkel tasked PM Johnson to come up with an alternative to the Irish backstop within 30 days. Gains to the currency are capped as uncertainty prevails.EUR
The euro initially gained strength on better-than-forecast PMI data but failed to sustain gains and is headed towards a 3-week low. Gains were offset by macroeconomic events including a weaker Chinese currency, Brexit concerns and overall uncertainty in the market ahead of US Fed Chairman Powell’s speech set for tomorrow.CAD
The Canadian dollar gained some strength after not-so-dovish FOMC minutes and a better than expected Canadian CPI report. A pickup in oil prices further boosted the loonie. Apprehension in the market will persist today as traders await Powell’s speech tomorrow.ASIA/PACIFIC
The Chinese yuan remains above the psychological 7 level and pushed 7.1 this morning – the weakest level in a decade. The psychology behind the weaker currency is that it will make capital more expensive to leave the country, while also making imports more expensive.