- EUR/USD is expected to deliver a lackluster performance ahead of Fed Powell’s speech.
- Fed’s Powell is expected to follow the footprints of RBNZ’s Orr and may sound hawkish
- The arrival of winter will impact the already vulnerable Europe energy market.
The EUR/USD pair is auctioning in a limited territory as investors are awaiting commentary from Federal Reserve (Fed) chair Jerome Powell at Jackson Hole Economic Symposium. The asset is oscillating in a narrow range of 0.9963-0.9976 ahead of cues from Fed Powell’s commentary for more informed decisions. However, the downside remains favored as odds are favoring a hawkish commentary on interest rates.
The cues from Reserve Bank of New Zealand (RBNZ) Governor Adrian Orr's commentary at Jackson Hole clear that the central bank will stick to its policy tightening strategy, keeping in mind that the economy will face more heat from the unavailability of cheap money in the economy. More or less, a similar hawkish commentary is expected from Fed’s Powell over guidance on interest rates.
There is no denying the fact that price pressures have displayed signs of maximum upside but an inflation rate figure above 8% is still vulnerable to the economy. So investors should brace for more decline in the extent of economic activities as rate hikes will keep up the ongoing pace.
On the Eurozone front, investors are worried over soaring energy prices as winter is knocking at the door. The European economy is facing the heat of an energy crisis after its embargo on Russian energy imports. It seems like the hasty decision by the European Union (EU) to boycott Russian energy is haunting European Central Bank (ECB) policymakers.
The energy supply crisis is expected to accelerate further as Nord Stream 1 pipeline from Russia to Germany through the Baltic Sea for supplying natural gas is going under unscheduled maintenance. Therefore, the pipeline will remain shut for the last three days of August.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD clings to daily gains above 1.0650
EUR/USD gained traction and turned positive on the day above 1.0650. The improvement seen in risk mood following the earlier flight to safety weighs on the US Dollar ahead of the weekend and helps the pair push higher.
GBP/USD recovers toward 1.2450 after UK Retail Sales data
GBP/USD reversed its direction and advanced to the 1.2450 area after touching a fresh multi-month low below 1.2400 in the Asian session. The positive shift seen in risk mood on easing fears over a deepening Iran-Israel conflict supports the pair.
Gold holds steady at around $2,380 following earlier spike
Gold stabilized near $2,380 after spiking above $2,400 with the immediate reaction to reports of Israel striking Iran. Meanwhile, the pullback seen in the US Treasury bond yields helps XAU/USD hold its ground.
Bitcoin Weekly Forecast: BTC post-halving rally could be partially priced in Premium
Bitcoin price shows no signs of directional bias while it holds above $60,000. The fourth BTC halving is partially priced in, according to Deutsche Bank’s research.
Week ahead – US GDP and BoJ decision on top of next week’s agenda
US GDP, core PCE and PMIs the next tests for the Dollar. Investors await BoJ for guidance about next rate hike. EU and UK PMIs, as well as Australian CPIs also on tap.