Dollar Rallies Ahead of Powell's Pivotal Speech
The dollar gained before Federal Reserve Chair Powell's speech, where he might provide insights on future rate cuts. Weak job reports have increased expectations for a cut. The dollar's performance fluctuates amid labor market updates and trade policies, with traders predicting significant economic implications.
The dollar strengthened on Thursday, ahead of a pivotal speech by Federal Reserve Chair Jerome Powell. Traders are keenly watching for any indications on whether the U.S. central bank might cut interest rates at next month's meeting. Speculation has surged following a weak jobs report in July, with hopes for a rate cut on the rise.
Economists anticipate Powell will address the labor market's current state, especially considering the theme of this year's Fed's Jackson Hole meeting, "Labor Markets in Transition." Eric Theoret, a strategist at Scotiabank, highlighted potential narratives Powell could leverage, including payroll data and rising jobless claims.
However, Powell might withhold signals on rate cuts until August's data is analyzed. While the market predicts imminent cuts, dissenting voices within the Fed, such as Kansas City President Jeffrey Schmid, argue against haste given stable inflation and labor conditions.
(With inputs from agencies.)
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