The greenback recovered from a 13-month low awaiting what Jerome Powell will say in Jackson Hole
He global dollar rebounded on Thursday from a 13-month low against the euro before the president of the Federal Reserve (Fed), Jerome Powell, give your speech in Jackson Hole and at a time when the recent weakness of the greenback was seen as exaggerated.
The US currency has fallen in recent days due to concerns about the weakening economy and expectations that the Fed is close to cutting interest rates. interest rates, Powell’s comments are therefore important. But it is not yet known how much the currency will weaken and whether this will lead the US central bank to cut rates by 25 or 50 basis points at its September meeting.
He dollar index rose 0.38% to 101.50, after reaching 100.92 on Wednesday, its lowest level since December 28. Meanwhile, the euro fell 0.36% to $1.111.
Sterling hit a 13-month high, rising 0.02% to $1.3093, after earlier touching $1.3130. The dollar strengthened 0.65% to $146.2 Japanese yen.
The probabilities on interest rates
The odds of a cut of 50 basis points or more increased after the report employment July will show lower-than-expected job gains and an unexpected increase in the unemployment rate. unemployment, although this price has faded as other data points to better growth.
“He dollar “It’s been under a lot of pressure lately, but I think it’s getting to a point where it’s quite oversold,” he said. Brad Bechtel, Global Head of FX at Jefferies in New York.
“We’ve moved away a little bit from that sort of emergency situation that we got into after the payrolls release, but the dollar seems to be trading as if we’re still in that state of emergency,” Bechtel said.
A massive liquidation of operations carry trade, in which traders borrowed yen to fund purchases of U.S. assets, added to market moves after the payrolls report and made rate cut pricing more extreme.
Traders now see a 25% chance of a 50-basis-point cut next month, down from 38% on Wednesday, and a 75% chance of a 25-basis-point cut, according to the tool. FedWatch from the CME Group.
Source: Ambito
