Traders Prepare For Jackson Hole Speeches

The dollar gained against the yen but inched down against the euro on Friday, as traders cleared the decks for speeches by Federal Reserve chief Janet Yellen and her euro zone counterpart Mario Draghi at a central bank meeting in Jackson Hole, Wyoming.A debate in the U.S. Congress over raising the government’s debt ceiling has begun to loom over the U.S. currency, with lawmakers expected to have just two weeks to agree a deal when they return in September.But with trade thinned by the last weeks of the European holiday season, and a bank holiday weekend in the world’s main currency trading hub London, expectations of more signs from Yellen on plans to reduce the Fed’s balance sheet had steadied the greenback overnight.It was on course to end the week 0.4 percent stronger against the yen, having slipped to as low as 108.60 yen on tensions stemming from the Korean Peninsula.

The ECB’s job has been made harder by a stronger euro and traders are still wary of any comment on the currency’s strength from Draghi.ADVERTISINGThe dollar index against a basket of six major currencies was also up 0.1 percent at 93.382 .DXY after nudging up 0.15 percent overnight on the back of a rise in U.S. Treasury yields.”If anything, Draghi may deliver a rather dovish message that still leaves the door open to tapering at the end of the year while carefully managing the euro lower,” said Oanda analyst Craig Erlam.

Source: FOREX-Dollar inches higher ahead of Jackson Hole

 

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Craig Erlam

Craig Erlam

Senior Currency Analyst at OANDA
Based in London, England, Craig Erlam joined OANDA in 2015 as a Market Analyst. With more than five years' experience as a financial market analyst and trader, he focuses on both fundamental and technical analysis while conducting macroeconomic commentary. He has been published by The Financial Times, Reuters, the Wall Street Journal and The Telegraph, and he also appears regularly as a guest commentator on networks including Sky News, Bloomberg, CNBC and BBC. Craig holds a full membership to the Society of Technical Analysts and he is recognized as a Certified Financial Technician by the International Federation of Technical Analysts.