Forex Today: A firm Dollar awaits Fed’s Powell

Matías Salord FXStreet

All eyes are on the Kansas City Fed's Jackson Hole Symposium. On Friday, ECB's Lagarde and the Fed's Powell will speak. During the Asian session, the Tokyo Consumer Price Index is due. Later in the day, a new reading of German GDP and the IFO survey will be released, and later the University of Michigan's Consumer Sentiment report.

Here is what you need to know on Friday, August 24:

After a brief correction, the US Dollar Index bounced back and climbed above 104.00, reaching its highest level since early June. Fundamental factors, risk aversion, and higher US Treasury yields continue to support the Greenback.

Market attention is focused on Jackson Hole. First, European Central Bank (ECB) President Christine Lagarde will speak at 11:00 GMT, followed by Federal Reserve (Fed) Chair Jerome Powell at 14:00 GMT. Volatility is expected, and it could lead to sharp moves across financial markets.

Data for the US on Thursday came in mixed but did not weigh down the US Dollar. On Friday, the University of Michigan will release its Consumer Sentiment report.

Comments from Federal Reserve officials pointed in different directions, with Fed's Harker mentioning that they have probably "done enough" with policy while Fed's Collins warned that more rate hikes are possible.

The 10-year US Treasury yield rebounded but remained below recent highs, reaching 4.2%, while the 2-year yield climbed back above 5%. The higher yields weighed on the Japanese Yen, which was among the worst performers despite a decline in US stocks. USD/JPY rose from 144.65 to 145.85, awaiting Powell near monthly highs.

EUR/USD dropped back to 1.0800. The pair is trading with a bearish bias, slightly above the 200-day Simple Moving Average (SMA). ECB President Lagarde will speak at Jackson Hole on Friday. As for data, a new reading of German Q2 GDP and the IFO Survey are due.

USD/CHF consolidated above 0.8800 and posted the highest daily close in a month near 0.8850. Switzerland will release employment data for the second quarter on Friday.

GBP/USD resumed its downside after failing to hold above the 20-day SMA at 1.2740, tumbling below 1.2600 to reach fresh monthly lows.

AUD/USD gave up Wednesday's gains and approached the 0.6400 mark. NZD/USD failed to regain 0.6000 and dropped to 0.5920. The Antipodean currencies remain under pressure amid cautious market sentiment.

The Turkish lira was the top performer after a larger-than-expected rate hike from the Turkish central bank. USD/TRY plummeted from 27.00 to 25.60.

Like this article? Help us with some feedback by answering this survey:

Author

Matías Salord

FXStreet

Matías started in financial markets in 2008, after graduating in Economics. He was trained in chart analysis and then became an educator. He also studied Journalism. He started writing analyses for specialized websites before joining FXStreet.

EUR/USD stays well offered below 1.1800

The selling pressure on EUR/USD is picking up pace, with the pair slipping decisively below the key 1.1800 level and sliding to fresh two week lows as Wednesday’s session draws to a close. The move lower comes as the US Dollar finds renewed strength after the latest round of US data and the release of the FOMC Minutes. Next of note on the docket will be the US weekly Initial Jobless Claims.

GBP/USD reaches multi-day lows near 1.3500

GBP/USD reverses its initial upside momentum and is now adding to previous declines, approaching the 1.3500 region on Wednesday. Cable’s downtick comes on the back of decent gains in the Greenback and easing UK inflation figures, which seem to have reinforced the case for a BoE rate cut in March.

Gold battle to regain $5,000 continues

Gold is back on the front foot on Wednesday, shaking off part of the early week softness and challenging two-day highs near the $5,000 mark per troy ounce. The move comes ahead of the FOMC Minutes and is unfolding despite an intense rebound in the US Dollar.

Bitcoin has found or is near a bottom, extended consolidation to follow: K33

Bitcoin (BTC) is nearing or has already established a bottom, which could be followed by a sustained period of slow price movement, according to K33.

Mixed UK inflation data no gamechanger for the Bank of England

Food inflation plunged in January, but service sector price pressure is proving stickier. We continue to expect Bank of England rate cuts in March and June. The latest UK inflation read is a mixed bag for the Bank of England, but we doubt it drastically changes the odds of a March rate cut.

Sui extends sideways action ahead of Grayscale’s GSUI ETF launch

Sui is extending its downtrend for the second consecutive day, trading at 0.95 at the time of writing on Wednesday. The Layer-1 token is down over 16% in February and approximately 34% from the start of the year, aligning with the overall bearish sentiment across the crypto market.