Countdown to Powell’s speech

"The only place where success comes before work is in the dictionary." - Vidal Sassoon

 

 

HEADLINES

 

 

• Dollar gains on renewed taper speculation
• Oil rally falters on pandemic surge, renewed Mexico supply
• Gold price down as Fed officials lean hawkish
• S&P 500 Stalls Amid Caution on Wall Street Ahead of Powell
• Crypto Pullback Deepens; Expect Higher Volatility
• US Dollar Index to reach new highs beyond 94 as taper timelines remain intact – Westpac

 

 

FOREX

 

 

Dollar gains on renewed taper speculation

 

The greenback ended the day with modest gains against most major rivals.  Geopolitical tensions in Afghanistan and comments from US Federal Reserve Robert Kaplan, who said that September would be the time to outline tapering and start it in October, were behind the slump. James Bullard, another member of the central bank, also made comments in the same direction.

 

 

COMMODITIES

 

 

Oil rally falters on pandemic surge, renewed Mexico supply

 

Oil settled lower on Thursday, snapping a three-day rally on renewed concerns over demand due to rising COVID-19 infections and as Mexico restored some output after a fire disrupted supply. Losses were limited by the potential for other supply interruptions. Energy companies prepared for the possibility of a severe storm hitting the U.S. Gulf Coast this weekend.

 

Gold price down as Fed officials lean hawkish

 

Gold and silver prices are moderately lower in early trading Wednesday, as the first Federal Reserve officials' comments are coming out of a key Fed Reserve meeting, and they favor the U.S. monetary policy hawks. October gold futures were last down $7.40 at $1,780.80. Kansas City Fed President Esther George Thursday morning say on CNBC that recent stronger U.S. economic data is cause for the U.S. central bank to begin to discuss tightening its monetary policy.

 

 

STOCKS

 

 

S&P 500 Stalls Amid Caution on Wall Street Ahead of Powell

 

The S&P 500 stumbled Thursday, as investors erred on the side of caution amid expectations the Federal Reserve could drop its clearest hint yet that loose monetary policy measures will be reined in sooner rather than later.  Ahead of the symposium on Friday, Fed speakers have signaled that the central bank is keen to begin tapering its monthly bond purchases to avoid having to play catchup later down line and risk more aggressive moves to curb inflation.  

 

 

CRYPTO

 

 

Crypto Pullback Deepens; Expect Higher Volatility

 

Cryptocurrencies were mostly lower on Thursday as bullish sentiment wanes. Stocks were also lower as Federal Reserve Bank of Dallas President Robert Kaplan mentioned during an interview on CNBC that he would like to see tapering of bond purchases announced in September. Bitcoin was trading around $46,000 at press time and is down about 4% over the past 24 hours. Technical charts suggest the pullback could stabilize between the $42,000-$45,000 support zone.

 

 

ANALYSIS

 

 

US Dollar Index to reach new highs beyond 94 as taper timelines remain intact – Westpac

 

“Our read is that while Fed officials note the risks of the delta strain, taper timeline remains intact.

“The Nov/Dec FOMC meetings look opportune for a taper announcement. That would leave the USD’s broad uptrend into Q4 intact, especially with key ECB officials pushing back on expectations they could slow PEPP purchases at their Sep meeting.”

“Fresh marginal DXY highs just beyond 94 are on the cards into Q4. Sustained DXY beyond that would require a setback in the Eurozone's recovery path and/or further covid setbacks in China.”

 

 

CHART

 

 

Euro / US dollar – Daily Candlesticks

Source: GKFX Prime Metatrader 4

EUR/USD formed a bullish RSI divergence and rallied off the lows. The recent highs and 20 DMA re resistance, while the recent lows are support. - Prepared by Trading Writers*

 

 

CALENDAR

 

 

*Times in GMT

Source: FX Street Economic Calendar

 

SOURCE

 

https://www.fxstreet.com/economic-calendar
https://www.fxstreet.com/news/us-dollar-index-to-reach-new-highs-beyond-94-as-taper-timelines-remain-intact-westpac-202108260907
https://www.fxstreet.com/news/forex-today-dollar-gains-on-renewed-taper-speculation-202108261959
https://www.investing.com/news/stock-market-news/sp-500-stalls-amid-caution-on-wall-street-ahead-of-powell-2601023
https://www.kitco.com/news/2021-08-26/Gold-price-down-as-Fed-officials-lean-hawkish.html
https://www.coindesk.com/markets/2021/08/26/market-wrap-crypto-pullback-deepens-expect-higher-volatility/