Forex Today: US Dollar climbs higher ahead of Fed Chair Powell's speech at Jackson Hole

Eren Sengezer FXStreet

Here is what you need to know on Friday, August 25:

The US Dollar gathered strength against its rivals in the second half of the day on Thursday and the US Dollar Index (DXY) registered its highest daily close since early June. The USD preserves its strength early Friday as market participants eagerly await Fed Chairman Jerome Powell's speech at the Jackson Hole Symposium later in the day. The European economic docket will feature IFO sentiment survey and European Central Bank (ECB) President Christine Lagarde will speak in the late American session.

Although the USD struggled to outperform its rivals following some dovish comments from Fed officials early Thursday, the negative shift seen in risk sentiment provided a boost to the currency. Boston Federal Reserve President Susan Collins and Philadelphia Fed President Patrick Harker both said that they may have reached a point where they could hold rates steady. Following Wednesday's impressive upsurge, the Nasdaq Composite Index lost more than 2% on Thursday and the S&P 500 Index declined nearly 1.5%. Early Friday, US stock index futures trade mixed, while DXY clings to modest gains above 104.00.

US Dollar price in the last 7 days

The table below shows the percentage change of US Dollar (USD) against listed major currencies in the last 7 days. US Dollar was the strongest against the Pound Sterling.

	USD	EUR	GBP	CAD	AUD	JPY	NZD	CHF
USD		0.81%	1.40%	0.37%	-0.08%	0.26%	0.40%	0.82%
EUR	-0.83%		0.58%	-0.45%	-0.92%	-0.59%	-0.43%	0.00%
GBP	-1.43%	-0.59%		-1.05%	-1.51%	-1.16%	-1.01%	-0.59%
CAD	-0.37%	0.44%	1.02%		-0.46%	-0.13%	0.03%	0.45%
AUD	0.06%	0.91%	1.50%	0.46%		0.33%	0.46%	0.88%
JPY	-0.27%	0.56%	1.15%	0.12%	-0.36%		0.14%	0.57%
NZD	-0.42%	0.38%	0.96%	-0.06%	-0.52%	-0.18%		0.38%
CHF	-0.83%	0.00%	0.59%	-0.45%	-0.92%	-0.59%	-0.42%

The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Euro from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent EUR (base)/JPY (quote).

After recovering above 1.0850 during the European trading hours on Thursday, EUR/USD reversed its direction and closed the day deep in negative territory. The pair continued to push lower early Friday and was last seen losing 0.2% on the day at around 1.0780. Earlier in the day, the data from Germany showed that the real Gross Domestic Product contracted 0.2% on a yearly basis in the second quarter, matching the previous estimate and the market expectation.

GBP/USD lost more than 100 pips on Thursday and broke below 1.2600. The pair stays on the back foot and trades at its weakest level in over two months near 1.2570 in the European morning.

USD/JPY recovered above 145.00 late Thursday and extended its rally beyond 146.00 early Friday. The Annual Tokyo Consumer Price Index in August rose 2.9%, down from 3.2% recorded in July and slightly below the market expectation of 3%. Bank of Governor Kazuo Ueda will speak at the Jackson Hole Symposium on Saturday.

Despite the broad-based USD strength, Gold price recorded gains for the fourth straight day on Thursday as US Treasury bond yields edged lower on dovish Fed commentary. XAU/USD stays relatively quiet and trades in a tight channel above $1,910 early Friday.

Bitcoin failed to build on Wednesday's gains and closed in the red on Thursday. At the time of press, BTC/USD was moving sideways near $26,000. Ethereum fell more than 1% on Thursday and was last seen trading in negative territory slightly below $1,650.

Author

Eren Sengezer

FXStreet

As an economist at heart, Eren Sengezer specializes in the assessment of the short-term and long-term impacts of macroeconomic data, central bank policies and political developments on financial assets.

GBP/USD bounces off lows, back above 1.3200

After bottoming out near 1.3160, GBP/USD manages to regain a bit of shine and reclaim the 1.3200 mark and beyond at the end of the week. Stronger-than-expected UK Retail Sales data seem to be helping the British Pound limit its losses, while the chaotic UK political environment keeps the bulls at bay for now.

EUR/USD looks consolidative around 1.1460

EUR/USD stages a modest rebound after slipping to a three-month low below 1.1420 at the end of the week. That said, the pair now looks to consolidate humble gains just above 1.1460 despite growing uncertainty surrounding the next round of US-Iran negotiations, which keeps the US Dollar’s downside contained.

Gold slips back to six-day lows, targets $4,100

Gold retreats for the third consecutive day on Friday, eroding gains seen in the first half of the week and approaching the key $4,100 mark per troy ounce. Indeed, the precious metal continues to face headwinds from the Fed's hawkish stance and renewed uncertainty surrounding the next round of US-Iran negotiations.

Solana extends correction despite ETF inflows, RWA adoption

Solana (SOL) price edges below $70 extending its losses for the fourth straight day this week. The institutional demand for Solana is building, with steady inflows so far this week and Morgan Stanley’s amended S-1 filing for a Solana-focused Exchange-Traded Fund.

The Iran war didn't break the US economy, but what happens next?

Nearly four months after the start of the Iran war, the US economy remains remarkably resilient. While the conflict initially triggered a severe disruption to global energy markets and a sharp rise in Oil prices, recent diplomatic progress between Washington and Tehran has eased concerns about a prolonged supply shock.

Regime change: Inside Kevin Warsh's first move to make the Fed unreadable on purpose

The rate did not move. That was the least interesting thing about Kevin Warsh's first meeting in charge of the Fed. The FOMC held its benchmark at 3.50%-3.75% for the fourth straight meeting, exactly as priced, and then the new chair used his first press conference to dismantle the machinery the market has leaned on for a decade.