Attention on NFPs post-Jackson Hole

Writing just before Fed Chair Warsh takes the stage in Jackson Hole, the week just gone has seen most dollar pairs track sideways, largely undisturbed. Geopolitical stories have dominated, with US-Iran negotiations ongoing, US-Canada trade talks collapsing, and the CIA Chief paying a surprise visit to Moscow. For now though, traders continue to look through the noise, instead taking a steer from the light data calendar, meaning that quiet summer trading conditions have prevailed in another subdued period for FX markets.

The week ahead sees the end of August and the summer holidays, with September set to offer a busier calendar of events and likely, more market volatility. Kicking off the new month, traders will see rate decisions from the BoC and RBNZ, with the latter set to hike, and both banks facing questions about the forward-looking path for rates. Filling out the docket, CPI releases in the eurozone, Poland and Switzerland are also of note. But headlining the calendar, Friday's US jobs report will be key for the chances of a Fed rate hike later this month, and through to year-end. Absent a surprise from Chair Warsh this afternoon, we continue to expect no change in Fed rates through the end of 2026, an outlook that should weigh on the dollar at the margin as Q3 draws to a close.

You can read the Week Ahead in full here:

Authors:

Nick Rees, Head of Macro Research

Barry van der Laan, Senior FX Market Strategist

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