Noor Trends News, Technical Analysis, Educational Tools and Recommendations
All key financial assets, including Thursday’s firmer US dollar, await Fed’s Powell speech on Friday before the Jackson Hole Symposium. Volatility is expected, and it could lead to sharp moves across financial markets.
All eyes are on the Kansas City Fed’s Jackson Hole Symposium. On Friday, ECB’s Lagarde and the Fed’s Powell will speak. During the Asian session, the Tokyo Consumer Price Index is due. Later in the day, a new reading of German GDP and the IFO survey will be released, and later the University of Michigan’s Consumer Sentiment report.
Economic Data
Data for the US on Thursday came in mixed but did not weigh down the US Dollar. On Friday, the University of Michigan will release its Consumer Sentiment report.
US Durable Goods Orders decline 5.2% in July vs. -4% expected
US: Initial Jobless Claims decline to 230K vs. 240K expected
US: Chicago Fed National Activity Index rises to 0.12 in July from -0.33
Key Developments
After a brief correction, the US Dollar Index bounced back and climbed above 104.00, reaching its highest level since early June. Fundamental factors, risk aversion, and higher US Treasury yields continue to support the dollar.
Fed Officials and price reaction
Comments from Federal Reserve officials pointed in different directions, with Fed’s Harker mentioning that they have probably “done enough” with policy while Fed’s Collins warned that more rate hikes are possible.
The 10-year US Treasury yield rebounded but remained below recent highs, reaching 4.2%, while the 2-year yield climbed back above 5%. The higher yields weighed on the Japanese Yen, which was among the worst performers despite a decline in US stocks. USD/JPY rose from 144.65 to 145.85, awaiting Powell near monthly highs.
EUR/USD dropped back to 1.0800. The pair is trading with a bearish bias, slightly above the 200-day Simple Moving Average (SMA). ECB President Lagarde will speak at Jackson Hole on Friday. As for data, a new reading of German Q2 GDP and the IFO Survey are due.
USD/CHF consolidated above 0.8800 and posted the highest daily close in a month near 0.8850. Switzerland will release employment data for the second quarter on Friday.
GBP/USD resumed its downside after failing to hold above the 20-day SMA at 1.2740, tumbling below 1.2600 to reach fresh monthly lows.
AUD/USD gave up Wednesday’s gains and approached the 0.6400 mark. NZD/USD failed to regain 0.6000 and dropped to 0.5920. The Antipodean currencies remain under pressure amid cautious market sentiment.
The Turkish lira was the top performer after a larger-than-expected rate hike from the Turkish central bank. USD/TRY plummeted from 27.00 to 25.60.
Also Read:
White House ponders shortening economic data one-hour rule
WTI ignores hawkish signals, rebounds ahead of Powell’s speech
US stocks drop more than 1% after Jackson Hole kicks off
Can China Overcome Local Debt Crisis?
Fed chair could lay the groundwork for a new era of higher interest rates
