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.

AUD/USD edges higher as hot CPI inflation and hawkish RBA lift rate hike bets

The AUD/USD pair gathers strength to near 0.7035 during the Asian trading hours on Friday. The Australian Dollar edges higher against the US Dollar as hotter Australian CPI inflation data has bolstered expectations of Reserve Bank of Australia rate hikes.

USD/JPY meets support near 157.00

USD/JPY retreats for the third consecutive day on Friday, revisiting the 157.00 region before attempting some recovery as investors continue to assess the latest BoJ meeting, where the central bank left rates unchanged, as widely anticipated.

Gold sinks to fresh yearly lows despite risk-off mood as Fed rate hike bets weigh

Gold slips to fresh year-to-date lows on Friday. The metal struggles despite a risk-off mood across markets, as expectations of further Federal Reserve (Fed) interest rate hikes continue to dominate price action, leaving Gold on track to end the month in negative territory.

Ripple Price Forecast: XRP bulls defend $1.20 as sell-side pressure triggers liquidations

Ripple (XRP) trades around $1.25 on Friday, rising from a short-term support level established at $1.20. This minor upward correction follows a sharp sell-off, triggered amid reports of a hack attack on the Binance exchange that impacted approximately $6.3 billion. The attack drove the broader crypto market on edge, as Binance suspended both deposits and withdrawals to contain the situation.

BoJ recap: A pause for now... but Japan has entered a new inflation phase

The Bank of Japan left its short-term policy rate unchanged at 1.25% but delivered a distinctly hawkish message on the risk of an inflation overshoot. The decision passed by 8-1, with board member Takata dissenting in favour of an increase to 1.5%, while Governor Kazuo Ueda stressed that the Bank would continue adjusting policy as needed.

The 2% inflation target came from a throwaway remark. It now moves trillions

The Federal Reserve's 2% inflation goal grew out of an off-the-cuff remark by a New Zealand politician in 1988. Bond investors still price long-term US debt as if 2% holds, so a change in how the Fed measures inflation would move markets.