Forex Today: US Dollar recovery loses steam as focus shifts to Jackson Hole

Eren Sengezer FXStreet

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

The US Dollar (USD) Index struggles to build on the recovery gains it recorded on Thursday and retreats toward the lower limit of its weekly range. The US economic docket will feature New Home Sales data for July on Friday. More importantly, Federal Reserve (Fed) Chairman Jerome Powell will deliver a keynote speech at the Jackson Hole Symposium at 14:00 GMT.

US Dollar PRICE This week

The table below shows the percentage change of US Dollar (USD) against listed major currencies this week. US Dollar was the weakest against the New Zealand Dollar.

Fed&#x27;s Chair Powell speech

	USD	EUR	GBP	JPY	CAD	AUD	NZD	CHF
USD		-0.88%	-1.31%	-1.40%	-0.66%	-0.78%	-1.74%	-1.65%
EUR	0.88%		-0.51%	-0.47%	0.22%	0.00%	-1.03%	-0.80%
GBP	1.31%	0.51%		-0.13%	0.69%	0.51%	-0.46%	-0.29%
JPY	1.40%	0.47%	0.13%		0.68%	0.59%	-0.23%	-0.39%
CAD	0.66%	-0.22%	-0.69%	-0.68%		-0.14%	-1.00%	-1.02%
AUD	0.78%	-0.00%	-0.51%	-0.59%	0.14%		-0.88%	-0.81%
NZD	1.74%	1.03%	0.46%	0.23%	1.00%	0.88%		0.11%
CHF	1.65%	0.80%	0.29%	0.39%	1.02%	0.81%	-0.11%

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 US Dollar from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent USD (base)/JPY (quote).

The USD outperformed its rivals on Thursday as the preliminary S&P Global PMI data for August showed that the economic activity in the private sector continued to expand at a healthy pace. Meanwhile, the risk-averse market atmosphere, as reflected by the sharp declines seen in Wall Street's main indexes, provided an additional boost to the currency. After rising 0.4% on Thursday and snapping a four-day losing streak, the USD Index stays on the back foot and was last seen losing 0.2% on the day at around 101.30. In the meantime, US stock index futures gain between 0.3% and 0.55%, pointing to an improving risk mood in the European session.

Bank of Japan (BoJ) Governor Kazuo Ueda told the Japanese parliament on Friday that there is no change in their stance about adjusting monetary easing if the economy and inflation continue to move in line with forecasts. Ueda further noted that they are not thinking about selling long-term Japanese government bonds as a tool to adjust interest rates. USD/JPY came under renewed bearish pressure following Ueda's remarks and was last seen trading at around 145.50, where it was losing 0.5% on the day. Earlier in the day, the data from Japan showed that the National Consumer Price Index rose 2.8% on a yearly basis in July, matching the flash estimate.

EUR/USD lose more than 0.3% on Thursday but managed to hold above 1.1100. The pair holds its ground early Friday and trades near 1.1120.

GBP/USD closed flat on Thursday despite the USD strength. The pair continues to stretch higher in the European morning and was last seen trading above 1.3100.

Gold extended its correction from the record-high it set earlier in the week and lost over 1% on Thursday. XAU/USD edges higher in the European morning on Friday but remains below $2,500.

Economic Indicator

Fed's Chair Powell speech

Jerome H. Powell took office as a member of the Board of Governors of the Federal Reserve System on May 25, 2012, to fill an unexpired term. On November 2, 2017, President Donald Trump nominated Powell to serve as the next Chairman of the Federal Reserve. Powell assumed office as Chair on February 5, 2018.

AUD/USD keeps range near mid-0.7100s as USD bulls await US CPI

AUD/USD steadies near mid-0.7100s in the Asian session on Friday, stalling the previous day's sharp decline to an over one-week low. The August PPI report reaffirmed Fed rate-hike bets and boosted the US Dollar on Thursday, which weighed heavily on the pair. However, hawkish RBA expectations limited losses for the Aussie as USD bulls now await the release of the US consumer inflation figures before placing fresh bets.

USD/JPY holds lower ground toward 154.00; looks to US CPI

USD/JPY holds lower ground toward 154.00 in the Asian session on Friday after hot Japanese PPI data bolster a more hawkish BoJ repricing and provide fresh impetus to the Japanese Yen. However, the downside appears capped as the US Dollar preserves overnight gains ahead of the latest US consumer inflation data.

Gold: Gains remain capped by $4,400

Gold regains composure and trades with decent gains on Friday, managing to refocus attention on the $4,440 mark per ounce troy. Therefore, the precious metal reverses Thursday’s decline as the US Dollar alternates gains with losses at the end of the week.

Ripple Price Forecast: XRP extends decline as returning ETF inflows fail to lift outlook

Ripple (XRP) falls below $1.33 on Friday, marking the third consecutive day of declines. The token continues to track the broader cryptocurrency market downturn, with investors closely monitoring heightened macroeconomic uncertainty ahead of the United States (US) Consumer Price Index (CPI) release and next week’s Federal Reserve (Fed) monetary policy decision.

Weekly focus – The hawks set the tone

Risky assets came under pressure this week as energy prices kept creeping higher and the ECB surprised the markets with a hawkish tone. The price of Brent crude touched USD 110 per barrel on Thursday night, highest since mid-May, as news emerged that the Yemeni Houthis had reached control of key port cities and islands near the Bab el-Mandeb strait.

Venezuela’s 65-billion-barrel Oil deal could reshape America’s inflation fight

The United States (US) has secured unprecedented access to part of Venezuela’s vast Oil reserves. The timing is particularly significant as the war with Iran is disrupting Middle Eastern supplies, keeping energy prices elevated and reviving concerns about inflation.