Update from North America

Dollar Mixed with Eyes on Jackson Hole

2 min read

The U.S. Dollar is trading in mixed but favorable ranges as Traders position themselves ahead of Federal Reserve Chair Kevin Warsh’s keynote address at the Jackson Hole Economic Policy Symposium tomorrow morning.

The symposium begins today, but Fed Chair Warsh’s speech is widely perceived as the real event for markets. Traders are keeping a close eye for any signal as to the Fed’s rate path moving forward, and many are anticipating further gains for the Buck coming out of it. There are others still who argue that Warsh will struggle to strike a hawkish tone in his address and will instead emphasize a focus on monetary policy and staying out of fiscal matters. 

On the data front, Initial Jobless Claims for the week ending August 22nd are due at 8:30am this morning, and are expected to print at 208k, an increase of 2k over the previous week. Additionally, Continuing Jobless Claims for the week ending August 15th will be released, and are expected to print at 1792k, a decrease of 7k from the previous week.

What to Watch This Week…

The complete Economic Calendar can be found here.

JPY

The Japanese Yen is little changed on the day after paring gains made following Bank of Japan Deputy Governor Ryozo Himino’s address in Saitama this morning. Himino indicated that the BoJ needs to pay more attention to upside price risks, and echoed Governor Kazuo Ueda’s position of increasing the rate of interest rate hikes if it is determined necessary. Those comments drove gains for the Yen, but after failing to offer a clear signal of a September rate hike, the market immediately took them back. 

AUD

The Australian Dollar is up against the Greenback for the third day in a row as Traders continue to reprice interest rate hike expectations from the Reserve Bank of Australia. Inflation figures for the month of July were released earlier this week and came out hotter than expected. This has resulted in a growing number of economists now expecting an additional interest rate hike by year’s end, with some anticipating it coming as early as the September meeting. Australian bond yields have also surged as a result, with open interest in the 3y notes reaching record highs. This aggressive repricing of the rate path has resulted in good support for the Aussie.