Dollar Dominates: Investors Await Powell's Jackson Hole Speech
The U.S. dollar is near a two-week high against major currencies, as investors moderate expectations for rate cuts ahead of Fed Chair Jerome Powell's speech. Market traders are now assessing a 70% chance of a 25 basis point cut in September, with economic data showing inflationary risks. Powell's upcoming speech is highly anticipated.
The U.S. dollar remained close to its two-week peak on Friday against key global currencies as investors tempered rate cut expectations before Federal Reserve Chair Jerome Powell's address at the Jackson Hole symposium. Both the euro and sterling hit lows against the dollar, steadying at $1.1160 and $1.3413 respectively.
The dollar index crept up 0.1% to 98.72, set for a 0.9% weekly gain, breaking a two-week losing streak. Hopes for reduced borrowing costs were tempered by inflationary signs and cautious Federal Reserve commentary, altering trader predictions to just under a 70% chance of a 25-basis-point rate cut in September, down from 75% previously.
Fed officials showed reluctance toward a rate cut next month, heightening anticipation for Powell's speech at 10 a.m. EDT during the annual Jackson Hole conference. Recent U.S. economic data and elevated inflation rates have stirred uncertainties, further affecting global currency markets.
(With inputs from agencies.)
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