Jackson Hole Symposium closely eyed

The US dollar rises ahead of Powell's statements

By Nadia Elbilassy | @Nadia Elbilassy | 25 August 2023

midday (3)
  • The US dollar continues to strengthen surpassing the 104 mark.

  • The Japanese yen continues to decline following the release of inflation data

  • European stocks see modest gains ahead of Lagarde's speech

Gold muted at $1915, dollar on to new highs

The US dollar index rallied against major currencies and commodities, after positive US unemployment claims data which reinforced expectations of further interest rate hikes before the end of year and to gather more clues on this, market’s spotlight will fall on the annual Jackson Hole Symposium sponsored by the US Fed, where policymakers from major central banks around the world will be speaking and giving us clues.

Fed members remain divided as Fed official Patrick Harker has stated that there had been enough tightening while Susan Collins stated that further interest rate hikes are still possible.

The US dollar was amongst the top winners of the week surpassing the 104-point hurdle, while gold prices remained largely flat near $1915.

The Japanese yen declines for the second consecutive session

The Japanese yen has weakened against a basket of major currencies, extending its losses for the second day in a row against the US dollar, particularly after the release of inflation data in Tokyo. The data indicated that the Bank of Japan does not face inflationary pressures that require adjustments in monetary policy.

The released data showed a slowdown in Japan's consumer price index on an annual basis, recording 2.9% compared to the previous reading of 3.2%. Meanwhile, the core index, which excludes food and energy, remained unchanged at the same level as the previous reading, recording 4%.

The Bank of Japan continues to adhere to expansionary monetary policy and negative interest rates, leaving the bank lagging behind major central banks that have resorted to higher interest rates to control high inflation rates.

European stocks in the green

European stocks saw modest gains, as markets await Christine Lagarde's speech at the Jackson Hole Economic Policy Forum to gain insights into the future path of monetary policy in upcoming meetings.

The DAX index rose to around 15,605 points, marking an increase of approximately 0.30%, the FTSE index has rose near 7,347 points. And for the French CAC was last seen near 7,217 points.

Data released today showed Germanys GDP failed to achieve any growth on a quarterly basis, remaining unchanged at 0% adding to concerns about Germanys economy.