Dollar sell-off continues ahead of Jackson Hole Economic Symposium
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Daily Currency Update
The dollar sell-off has continued over the past 24 hours as markets anticipate a key speech from US Federal Reserve Chairman Jay Powell this Friday at the annual Jackson Hole Economic Symposium in Wyoming. This highly anticipated event comes as the Federal Reserve approaches its first interest rate cut since 2020. The primary focus is on whether the Fed will opt for a substantial 50 basis point cut at its September 18th policy meeting or a more modest 25 basis point reduction, which is now favoured by markets. Powell's insights into the state of the US economy, particularly in light of the recent unexpected rise in unemployment, will also be closely watched.The anticipation of lower borrowing costs has led to a decline in the dollar's value and a rally in stock markets. Yesterday, EUR/USD broke above 1.11 for the first time since Christmas, reaching an intraday high of 1.1132. GBP/USD also hit its highest level since July last year, peaking at 1.3052. Both have slightly receded this morning but remain near their respective highs.
Key Movers
It has been another quiet 24 hours on the data-front with no market moving releases from the UK, Eurozone or US. This evening we get the minutes from the last Fed policy meeting released. Given this meeting took place before a lot of the stock market volatility seen at the start of August it is likely to not garner the usual level of interest. That aside its another quiet day however tomorrow we do have the monthly PMI readings from around the world so those, especially the US ones, could create some swings for dollar pairs.Expected Ranges
- GBP/USD: 1.2975 - 1.3100 ▲
- GBP/EUR: 1.1675 - 1.1755 ▼
- GBP/AUD: 1.9280 - 1.9415 ▲
- EUR/USD: 1.1070 - 1.1200 ▲