Investors look at Jackson Hole and rate cut bets

The loss of impetus in the risk-associated universe allowed the US Dollar to rebound from Wednesday’s 2024 peaks on Thursday, helped by the equally decent bounce in US yields, all prior to the speech by Fed’s Powell at Jackson Hole.

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

After bottoming out in the sub-101.00 region on Wednesday, the USD Index (DXY) regained some balance and revisited the 101.60-101.65 band on Thursday. Chief Powell’s speech at the Jackson Hole Symposium will take centre stage on August 23, seconded by New Home Sales.

The move higher in the Greenback prompted EUR/USD to give away part of its recent gains to level north of the 1.1100 mark. On August 23, the ECB will release its Consumer Inflation Expectations survey.

GBP/USD was the exception among its risky peers, managing to maintain a bullish bias for the sixth consecutive day and hitting a new YTD peak around 1.3130. The Consumer Confidence tracked by GfK is due on August 23, followed by the speech by the BoE’s A. Bailey.

USD/JPY rose markedly on the back of the robust bounce in the dollar and higher US yields. The BoJ’s K. Ueda will testify before Parliament on August 23, ahead of the Inflation Rate.

The sharp rebound in the dollar hurt AUD/USD and motivated it to add to Wednesday’s losses and challenge the 0.6700 neighbourhood. The next key event in Oz will be the RBA’s Monthly CPI Indicator on August 28.

Prices of WTI set aside usual demand concerns from China and focused on the prospects of interest rate cuts by the Fed, sparking a marked rebound  beyond the $73.00 mark per barrel.

Prices of Gold broke below the $2,500 mark per ounce troy in response to the strong pick-up in the dollar and higher US yields. Same path followed its cousin Silver, which retreated to three-day lows in the sub-$29.00 zone per ounce.