US Dollar Analysis & News
- FX Muted with Markets in Wait and See Mode
- US Durable Goods Broadly Better Than Expected, USD Impact Minimal
FX Muted with Markets in Wait and See Mode
FX markets are very much in wait and see mode ahead of Fed Chair Powell’s speech at the Jackson Hole Symposium. Although, markets participants are beginning to anticipate a more cautious statement by Powell after the typically hawkish Kaplan last week suggested that the timing of the Fed’s taper could be altered in light of the rise in Covid cases. In turn, the USD has since pulled back from its multi-month highs, while the risk assets have been underpinned. Another tell that it will become harder to ignore the current Covid backdrop is that the Jackson Hole Symposium will now take place virtually.
Further framing of market expectations will be determined by the raft of Fed speakers in the lead up to Powell’s speech. CNBC has released their Fed interview schedule which will predominantly consist of the more hawkish members and thus should we see similar rhetoric over mounting covid concerns, the USD may extend its pullback. A reminder that the official Fed schedule will be released at 01:00BST Friday 27th.
CNBC Fed Interview Schedule
US DURABLE GOODS RECAP
US durable goods fell for the first time in two months (-0.1%), however, the drop was better than expected (-0.3%), while ex-transport also printed ahead of consensus. The impact on the USD was minimal albeit continuing to hold support at the psychological 93.00. Short term resistance resides at 93.20 with 93.50 above, while on the downside support sits at 92.73 (20DMA) and 92.50.
US Dollar Chart: Daily Time Frame