The much-anticipated Jackson Hole annual meeting of global central banks debuted a few days ago. Federal Reserve Chairman Jerome Powell delivered a speech on Friday (26th), emphasizing his firm stance on fighting inflation, driving the dollar index to rise sharply , Weekly closed in red. The Australian dollar and the British pound fell together, and the Japanese yen touched a new one-month low.
The ICE U.S. Dollar Index (DXY), which tracks the greenback against six major currencies, was up 0.34 percent at 108.84 in late New York trade, up 0.6 percent for the week.
The DXY fell briefly after data showed that the U.S. personal consumption expenditures (PCE) price index barely rose in July and inflation pressures appeared to have eased. Powell’s hawkish speech at the central bank’s annual meeting spurred the DXY to strengthen, reversing earlier declines .
Powell said the U.S. economy will need to maintain a tightening policy for a while until inflation is brought under control, because there is no quick way to deal with high prices, which means slower economic growth, weaker employment ahead, for households and Businesses bring some pain.
Ryan Detrick, chief market strategist at Carson Group, said: “For now, at least, hopes of a dovish turn are dashed. Powell needs to see signs of improvement in inflation data for more than a month, and he has made it clear that further tightening will continue ahead. policy.”
Powell, however, did not indicate where rates might rise before the end of policy tightening, saying only that he would raise rates as high as possible to bring inflation back to the central bank’s 2 percent target.
Joe Manimbo, a market analyst at Convera, said: “Overall, Powell is indeed a hawk, but he has not exceeded market expectations. Whether it will raise rates 2 or 3 next month is still inconclusive.” He also pointed out that 9 August employment and inflation data, released ahead of the monthly policy meeting, will now be key to the Fed’s decision on how much to raise interest rates.
Fed funds futures traders estimated a 60 percent chance of a three-size rate hike in September, up from 45 percent before the speech, and a 40 percent chance of a two-size rate hike.
Powell’s speech helped boost the dollar, dragging the pound to its lowest intraday level this week, down 0.82% to $1.1740 by the time of writing, down nearly 0.8% for the week.
Investors are also concerned about the impact of soaring home energy costs. UK gas and electricity market regulator Ofgem has sharply raised domestic energy prices, which will increase by 80% from October to an average of 3,549 pounds a year. Unless the government intervenes, millions of households will fall into fuel shortages, and businesses will also be facing difficulties.
Derek Halpenny, head of research at MUFG, said: “One of the possible reasons why leveraged funds have significantly increased their long positions in the pound in recent weeks is because they believe the new government will act to protect British households, but that It’s a risky bet because it’s not certain what the soon-to-be Prime Minister Liz Truss is going to do.”
The euro broke through the parity level against the dollar during the session, rising to a maximum of nearly $1.01, and then pulled back, down 0.14% to $0.9961 by the time of writing, and fell 0.7% this week.
Even with the risk of a recession looming, some European Central Bank (ECB) officials still hope for a sharp three-yard rate hike next month, but opponents argue that a recession could help curb inflation well above the central bank’s target, and advocate a steady rise. interest.
The Australian dollar fell 1.26% to $0.6890 against the US dollar, while the Japanese yen also fell nearly 1%, falling to a more than one-month low against the US dollar at 137.75 yen.
As of Saturday (27th) Taiwan time about 6:00 Price:
The dollar index was at 108.8209. +0.3773% The euro against the US dollar (EUR/USD) was quoted at $0.9961 per euro. -0.1404% GBP/USD (GBP/USD) was quoted at $1.1740. -0.8027% The Australian dollar against the US dollar (AUD/USD) was quoted at 1 Australian dollar at 0.6890. -1.2611% The US dollar against the Canadian dollar (USD/CAD) was quoted at 1.3034 Canadian dollars per US dollar. +0.8433% The U.S. dollar was quoted at 137.75 yen against the Japanese yen (USD/JPY). +0.9379%