The Dollar is Facing a Difficult Test

The dollar rose slightly in early European trade on Thursday but remained near a one-week low amid good risk appetite ahead of the Federal Reserve’s Jackson Hole keynote.

the US Dollar Index, which measures the greenback against a basket of six other currencies, was up 0.1% at 92.930, after falling to 92.801 overnight for the first time since mid-August.

EUR/USD fell 0.1% to 1.1761, after touching a one-week high of 1.1775 the day before, USD/JPY rose 0.1% at 110.05, and GBP/USD fell 0.1% to 1.3744. The risk-sensitive AUD/USD fell 0.3% to 0.7255, and the USD/TRY rose marginally by 0.04% to record at 8.3720.

The boost to risk appetite this week was the result of the US Food and Drug Administration’s decision to give full approval to the Covid vaccine developed by Pfizer and BioNTech, with the market assuming that full approval of the vaccines will follow. Another Covid is coming soon, so the peak of the Covid wave is near.

Adding to the optimism was news on Wednesday that new orders for US durable goods, excluding transportation equipment, grew 0.7% in July, a better-than-expected result.

There is more important data later Thursday, including weekly jobless claims and another reading of second-quarter GDP, but the focus remains on Friday’s speech by Federal Reserve Chairman Jerome Powell at a hypothetical meeting of US central bankers, usually It takes place at Jackson Hole in Wyoming.