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The dollar stabilized as investors awaited a highly anticipated speech by US Federal Reserve Chairman Jerome Powell, while analysts now doubt that the central bank chief will hint at a possible date to start reducing asset purchases.
The focus of the market this week is on the signals that the US central bank may send at its annual conference in Jackson Hole, which was launched on Thursday online, and Powell’s speech today will be the main event in it.
Fed chairs usually use the occasion to make predictions about future policy.
Analysts doubt that Powell will hint at when the board is likely to start reducing its asset purchase program yet. Market consensus indicates that the Fed Chairman will announce a stimulus cut in the last quarter of the year, and will provide a clear signal in one meeting before the actual announcement.
Any move away from a “more cautious approach” could give a boost to the dollar, said Tu Lan Noen, analyst at Commerzbank.
There was little change in the dollar index, which tracks the performance of the US currency against a basket of six major currencies, to trade at 93.046 by 0820 GMT.
The yield on the benchmark ten-year US Treasury bonds in the latest trading reached 1.3458%, after reaching 1.375%, after statements by a member of the Reserve Board that the Fed began to reduce asset purchases, the highest level since August 12.
Overnight, the safe-haven dollar received some support after a suicide bombing at Kabul airport.
The euro and the British pound were almost unchanged at $1.1754 and $1.3702.
