Home Daily Commentaries Powell reiterates hawkish Fed stance

Powell reiterates hawkish Fed stance

Friday 26 August, 2022

Daily Currency Update

The US dollar slipped slightly against a basket of major currencies then rebounded on Friday morning, following a highly-anticipated speech from US Federal Chair Jerome Powell at the annual Jackson Hole Economic Symposium.  Powell reiterated the central bank’s commitment to bringing down inflation to its 2% goal, which signals that they will continue to hike interest rates at an aggressive pace. But the Fed Chair didn’t confirm the size of the upcoming rate increase in September, only saying that the Fed will watch the economic data before the decision.  Before the speech, data showed that there were signs of easing US inflation in July. The core Personal Consumption Expenditures (PCE) price index decreased by 0.1%. The US Dollar Index was trading at 108.40 at the time of writing. 

Key Movers

EURUSD pushed up this morning immediately following Powell’s speech but erased some of its gains when USD recovered in mid-morning trading. The European Central Bank (ECB) minutes released on Thursday did not give markets any more information. However, concerns around a weak euro has become a key theme. Market participants will be closely paying attention to a number of ECB speakers in the calendar next week. EURUSD was trading at 0.99864 at the time of writing. 

Expected Ranges

  • EUR/USD: 0.9952 - 1.0048 ▲
  • GBP/USD: 1.1755 - 1.1897 ▼
  • AUD/USD: 0.6915 - 0.7005 ▼
  • USD/CAD: 1.2905 - 1.3009 ▲