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USD gains in lead up to Jackson Hole

"Don't be afraid to give up the good to go for the great." - John D. Rockefeller

 

 

HEADLINES

 

 

  • Dollar the strongest despite easing some
  • Yellen backs reappointing Powell as Fed chair - Bloomberg
  • Gold battles dollar as virus fears dampen risk appetite
  • Wall Street rallies as Fed jitters wane, but ends down for the week
  • FOMC Chairman Powell to echo message from July minutes at Jackson Hole – TDS

 

 

FOREX

 

 

Dollar the strongest despite easing some

 

The dollar gave up some ground at the end of the week, but it’s the strongest currency across the FX board. The better performance of equities and bouncing government bond yields put a cap on the greenback’s demand.

The main themes were the spread of the coronavirus Delta variant and its possible effects on the economic recovery, and US policymakers speeding up tapering talks. The Jackson Hole Symposium will take place by the end of this week, and market participants are eagerly waiting for Federal Reserve Chair Jerome Powell’s words on the matter.

 

Yellen backs reappointing Powell as Fed chair - Bloomberg

 

U.S. Treasury Secretary Janet Yellen has told senior White House advisers she backs reappointing Jerome Powell as U.S. Federal Reserve Chair, whose term expires in February, a Bloomberg News reporter wrote on Twitter.

 

 

COMMODITIES

 

 

Gold battles dollar as virus fears dampen risk appetite

 

Worries over a slowing economic recovery and possible tapering from the U.S. Federal Reserve dented appetite for riskier assets. But the dollar also benefited from safe-haven interest, pushing the currency to a 9-1/2-month high, making gold more expensive for other currency holders.

Against the backdrop of recent tapering hints from the U.S. central bank, the spotlight shifts to the Fed’s annual get-together next week in Jackson Hole, Wyoming, which could shed further light on monetary strategy and timeline.

 

 

STOCKS

 

 

Wall Street rallies as Fed jitters wane, but ends down for the week

 

Wall Street rallied to close sharply higher on Friday, closing a tumultuous week on easing concerns over whether the U.S. Federal Reserve could begin tightening its dovish monetary policy sooner than expected. Market-leading tech and tech-adjacent megacaps, which weathered the pandemic recession better than most, once again provided the biggest lift.

Growth stocks were also given a boost by U.S. Treasury yields, which ended the week lower due to concerns the health crisis could be a longer than expected hindrance to economic revival.

 

 

ANALYSIS

 

 

FOMC Chairman Powell to echo message from July minutes at Jackson Hole – TDS

 

"QE tapering is likely by year-end if the labor data continue to show strength, but don’t expect an announcement as soon as the September meeting. We continue to forecast a formal taper announcement in December, although November remains possible if the next two employment reports are unexpectedly strong."

"The core PCE price index appears to have risen more than the core CPI in July (0.4% versus 0.3%), boosted by data from the PPI. The rise in prices likely more than offset nominal growth in consumer spending; we estimate -0.3% for real spending and +0.2% for nominal. Income growth (forecast: +0.6%) was likely boosted by the expanded child tax credit."

 

 

CHART

 

 

Gold – Daily Candlesticks

Source: GKFX Prime Metatrader 4

XAU/USD is bumping up against former support now resistance at 1795.

A breakout could signify a move up towards 1850. - 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/fomc-chairman-powell-to-echo-message-from-july-minutes-at-jackson-hole-tds-202108201715
https://www.fxstreet.com/news/forex-today-dollar-the-strongest-despite-easing-some-202108221225
https://www.fxstreet.com/news/forex-today-dollar-the-strongest-despite-easing-some-202108221225
https://www.reuters.com/business/yellen-backs-reappointing-powell-fed-chair-bloomberg-tweet-2021-08-21/
https://www.cnbc.com/2021/08/20/gold-markets-dollar-covid-delta-variant.html

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