The U.S. Dollar is trading in familiar ranges ahead of awaited statements from the Jackson Hole Symposium and the reactions to come after.
Overview
Things have not been incredibly exciting within the realm of FX trading with the Buck overall floating within half of one percent range all week per the Bloomberg Dollar Spot Index. Investors and traders are experiencing a bit of anxiety about Federal Reserve action down the line and a big sell-off in tech has ignited talk about how we may be facing a tech bubble. Markets seem eager to get guidance on whether some stimulus will come via lowering borrowing costs, so if Fed Chairman Jerome Powell’s speaks with confidence and signals no need for a cut in September, equities and other classes could suffer.
After seeing some records across stock exchanges, August has been filled with some doubt about the sustainability of commercial trade and worries about the impact consumers may have to deal with when costs from tariffs are passed on. This development along with lowered odds that the Fed will cut aided in the Buck’s recovery. Later today, there could be major moves as Powell’s message may run into criticism very quickly. We shall see if chances change and volatility climbs.
What to Watch This Week…
- Monex USA Online is always open
The complete Economic Calendar can be found here.
EUR ⇑
The Euro is slowly climbing ahead of what may come from Jackson Hole’s gathering and discussion. With potential for talks between Ukraine and Russia, there has been confidence that an improved scenario, ceasefire or peace-planning, can boost economic growth for the Eurasian region as a whole. This thought has even incentivized German investors, who tend to play it very conservative, to jump into stocks. With growth an issue, room for it or belief that it will come strongly has Euro steady and with appreciation in mind.
MXN ⇑
The Mexican Peso is on the rise after data revealed that the Mexican economy is performing better than expected considering the pressures from tariffs and other changes in trade. Gross Domestic Product for Q2 showed a 0.6% pace of growth that stayed very consistent with the 0.7% for Q1. The annual average stands at 0.0%, so the economy has avoided contraction for now after uncertainty had affected investment decisions. Expect strong winds if the Buck gets volatile with central bank policy divergence an item that could send the currency pair spiraling.
