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.

EUR/USD looks to regain the 200-day SMA

EUR/USD regains some balance and trade just above 1.1600 the figure ahead of the opening bell in Asia. The pair initially dipped to the 1.1530 zone for the first time since November, always following the stronger US Dollar and the marked flight-to-safety in the context of the ongoing Middle East crisis

GBP/USD attacks 1.3300, refreshing three-month lows

GBP/USD is deep in the red near 1.3300, accelerating its downside to renew three-month lows in European trading on Tuesday. The ongoing escalation in the Iran war, combined with rising Oil prices, weighs negatively on the higher-yielding Pound Sterling as the US Dollar capitalizes on increased haven demand.

Gold bounces off lows, back above $5,100

Gold remains on the defensive, eroding part of the recent multi-day advance and managing to trade back above the $5,100 mark per troy ounce on Tuesday. The precious metal initially dropped just below the critical $5,000 threshold on the back of the persistent strength of the Greenback, higher US Treasury yields across the curve and investors' repricing of Fed rate cuts.