Market Brief, North America

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...

A selloff in the dollar is intensifying this morning as investors grow more confident in a clear easing signal from Chair Jerome Powell at the Federal Reserve’s Jackson Hole economic symposium later this week. The greenback is holding near a three-week low, almost erasing its year-to-date gains, Treasury yields are ratcheting lower, equity indices are climbing, and volatility assumptions are coming down as a tide of optimism washes over global markets. The euro is trading near its highest levels this year as investors turn more cautious on the European Central Bank’s rate cutting path. Measures of underlying inflation slowed only...