FX News: Dollar Steady as Jackson Hole Looms
FX News – After some cautious trading on Wednesday, the dollar is now hovering near three-week highs. Focus still remains on the Jackson Hole meeting this coming weekend.
The Federal Reserve slashed rates last month, the first time since 2008. According to Fed Chairman Jerome Powell, the move was a “mid-cycle adjustment.”
Forex markets are betting on further rate cuts before the year ends. The expectations lie on heightened trade tensions and sluggish global economic growth.
The US dollar index is near 98.17 as it gained 0.12% in the previous session. Last Tuesday, the greenback reached 98.33, which was its highest since August 1.
According to market analysts, US President Donald Trump has a “strong desire” for deep cuts. This could raise traders’ hopes for strong easing signals at Jackson Hole.
Deep Cuts in Jackson Hole?
Over the weekend, major central bankers are going to meet in Jackson Hole, Wyoming, including Powell.
FX news and market participants will focus on the information they can glean from the Fed commentary in Wyoming. The meeting comes after weeks of limited public appearances.
The speech that Powell will make would be the first public comments since slashing interest rates last month.
This year, the theme is “challenges for monetary policy.”
Forex markets would wait for the Fed Chairman to address short-term challenge of whether or not the Fed needs deep rate cuts.
Such rate cuts could serve to counter the unpleasant effects of the trade war and global risks.
Meanwhile, G7 leaders will also hold their own meeting over the weekend and on Monday. This includes President Donald Trump, and it will happen in French resort Biarritz.
Both Jackson Hole and Biarritz meetings will focus on global outlook that suffers from the aggressive trade war.
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