Currency Markets Run Out of Momentum in Countdown to Jackson Hole
A three-week decline in the dollar appears to be nearing exhaustion this morning, suggesting that traders are growing sceptical of Jerome Powell’s willingness to “out-dove” market expectations in Friday’s appearance at the Jackson Hole economic symposium. The most widely-tracked dollar index, the DXY, is holding steady after falling in the last three sessions, Treasury yields are moving sideways, and North American equity markets are setting up for a mixed open. We think the Federal Reserve chair could double down on July’s post-decision messaging on Friday, suggesting that it will “soon” be appropriate to begin easing policy. He might also acknowledge...