|

Forex Today: Investors look at Jackson Hole and rate cut bets

The loss of impetus in the risk-associated universe allowed the US Dollar to rebound from Wednesday’s 2024 peaks on Thursday, helped by the equally decent bounce in US yields, all prior to the speech by Fed’s Powell at Jackson Hole.

Here is what you need to know on Friday, August 23:

After bottoming out in the sub-101.00 region on Wednesday, the USD Index (DXY) regained some balance and revisited the 101.60-101.65 band on Thursday. Chief Powell’s speech at the Jackson Hole Symposium will take centre stage on August 23, seconded by New Home Sales.

The move higher in the Greenback prompted EUR/USD to give away part of its recent gains to level north of the 1.1100 mark. On August 23, the ECB will release its Consumer Inflation Expectations survey.

GBP/USD was the exception among its risky peers, managing to maintain a bullish bias for the sixth consecutive day and hitting a new YTD peak around 1.3130. The Consumer Confidence tracked by GfK is due on August 23, followed by the speech by the BoE’s A. Bailey.

USD/JPY rose markedly on the back of the robust bounce in the dollar and higher US yields. The BoJ’s K. Ueda will testify before Parliament on August 23, ahead of the Inflation Rate.

The sharp rebound in the dollar hurt AUD/USD and motivated it to add to Wednesday’s losses and challenge the 0.6700 neighbourhood. The next key event in Oz will be the RBA’s Monthly CPI Indicator on August 28.

Prices of WTI set aside usual demand concerns from China and focused on the prospects of interest rate cuts by the Fed, sparking a marked rebound  beyond the $73.00 mark per barrel.

Prices of Gold broke below the $2,500 mark per ounce troy in response to the strong pick-up in the dollar and higher US yields. Same path followed its cousin Silver, which retreated to three-day lows in the sub-$29.00 zone per ounce.

Author

Pablo Piovano

Born and bred in Argentina, Pablo has been carrying on with his passion for FX markets and trading since his first college years.

More from Pablo Piovano
Share:

Editor's Picks

EUR/USD holds firm above 1.1900 as US NFP looms

EUR/USD holds its upbeat momentum above 1.1900 in the European trading hours on Wednesday, helped by a broadly weaker US Dollar. Markets could turn cautious later in the day as the delayed US employment report for January will takes center stage. 

GBP/USD remains above nine-day EMA near 1.3650

GBP/USD recovers its recent losses from the previous session, trading around 1.3680 during the European hours on Wednesday. The technical analysis of the daily chart indicates a sustained bullish bias, as the pair trades within an ascending channel pattern.

Gold sticks to gains near $5,050 as focus shifts to US NFP

Gold holds moderate gains near the $5,050 level in the European session on Wednesday, reversing a part of the previous day's modest losses amid dovish US Federal Reserve-inspired US Dollar weakness. This, in turn, is seen as a key factor acting as a tailwind for the non-yielding yellow metal ahead of the critical US NFP release. 

US Nonfarm Payrolls expected to show modest job gains in January

The United States Bureau of Labor Statistics will release the delayed Nonfarm Payrolls data for January on Wednesday at 13:30 GMT. Investors expect NFP to rise by 70K following the 50K increase recorded in December.

S&P 500 at 7,000 is a valuation test, not a liquidity problem

The rebound from last week’s drawdown never quite shook the sense that it was being supported by borrowed conviction. The S&P 500 once again tested near the 7,000 level (6,986 as the high watermark) and failed, despite a macro backdrop that would normally be interpreted as supportive of risk.

BNB prolonged correction signals deeper bearish momentum
BNB (BNB), formerly known as Binance Coin, is trading below $618 on Wednesday, marking the sixth consecutive day of correction since the weekend. The bearish price action is further supported by rising short bets alongside negative funding rates in the derivatives market.