As I sit here and wait for the Jackson Hole Symposium it has dawn on me that it has been overhyped as it always is. Which means the ‘anticipation’ in FX markets is also probably overdone.
Looking at the consensus data on Refinitiv less than 40% of those surveyed believe Powell will lay out plans for taper to begin.
That pretty ease to argue, we get another non-farm payroll next week, we should be disappointed if the figure is less than 750- to 800,000 range couple this with CPI and the PCE data suggests that Powell can wait to the September Federal Open Markets Committee (FOMC) before making any form of announcement.
On the September FOMC it will be the first time a 2024 dot plot will be added to the Fed’s dot plots release – it will give us a better understanding of how many members see rate hikes in 2022, 2023 and at what rate we should expect in 2024 when rates should have moved.
So, lots to be mindful of going forward.
Busy week in data last week and need to list the big one as they did move the dial in the USD
Interesting to see that material exposed currencies have done well against the USD over the past week.
AUD/USD has moved off its $0.7134 low to be trading right back inside $0.72, it had slipped to $0.7230 at the end of the week and will be watched as US data drops this week.
NZD/USD jumped 0.9% to $0.695 on the RBNZ’s outlook. USD/CAD has fallen from $1.28 back to $1.259 as crude surged, but it too ease at the end of the week at $1.264
Looking across the Atlantic
EUR/USD is holding the $1.17 levels well, USD bulls just haven’t been able to push it through the $1.1720 support level. One to watch while GBP/USD also is holding the new $1.37 handle.
Big week this week and I suspect the USD will continue to win out in September.
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