U.S. Dollar Higher Ahead Of Powell's Speech
August 23 2019 - 2:17AM
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The U.S. dollar strengthened against its major counterparts in
early European deals on Friday, as investors await Fed Chairman
Jerome Powell's speech at the Jackson Hole Symposium later today
for additional clues about the outlook for interest rates.
Powell will address on topic "Challenges of Monetary Policy" at
10 am ET.
Traders keenly await whether Powell's remarks would confirm
their expectation of the quarter percentage-point rate cut next
month.
The Federal Open Market Committee's July meeting minutes
released on Wednesday showed that most officials observed the July
rate cut as a mid-cycle adjustment and not the start of an easing
cycle.
Powell's speech comes amid intense pressure from President
Donald Trump to deliver aggressive rate cuts to help support the
economy.
Investors also await new home sales due later in the day.
The Group of Seven (G-7) annual summit begins on Saturday in
France and it will likely end without a joint communique for the
first time in its 44-year history due to deepening rifts between
the heads of state.
The currency has been trading higher against its major
counterparts in the Asian session.
The greenback appreciated to a 3-week high of 0.9873 against the
franc, from a low of 0.9833 hit at 6:30 pm ET. The next possible
resistance for the greenback is seen around the 1.00 level.
The greenback climbed to a 3-day high of 106.67 against the yen,
compared to 106.43 hit late New York Thursday. If the greenback
rises further, 109.00 is likely seen as its next resistance
level.
Data from the Ministry of Internal Affairs and Communications
showed that Japan inflation rose 0.5 percent on year in July.
That was shy of forecasts for an annual increase of 0.6 percent
and down from 0.7 percent in June.
Reversing from a low of 1.2261 seen at 5:30 pm ET, the greenback
edged higher to 1.2195 against the pound. The greenback is seen
finding resistance around the 1.19 level.
The greenback bounced off to 0.6378 against the kiwi, coming off
from a low of 0.6396 it touched at 10:30 pm ET. On the upside, 0.62
is likely seen as the next resistance level for the greenback.
Figures from Statistics New Zealand showed that New Zealand
retail sales grew at a slower rate in the second quarter.
The total volume of retail sales rose by a seasonally adjusted
0.2 percent sequentially in the second quarter, which was slower
than 0.7 percent increase in the previous quarter. Economists had
forecasts for a rise of 0.3 percent.
The greenback spiked higher to a new 3-week high of 1.1056
versus the euro, from Thursday's closing value of 1.1079. The
greenback is likely to face resistance around the 1.09 level.
On the flip side, the greenback retreated slightly to 1.3310
against the loonie, from a 3-day high of 1.3327 hit at 1:25 am ET.
Next key support for the greenback is seen around the 1.30
area.
The greenback held steady against the aussie, after having eased
from an 8-day high of 0.6745 reached in the Asian session. At
yesterday's close, the pair was worth 0.6757.
Looking ahead, Canada retail sales for June and U.S. new home
sales for July are due in the New York session.
At 10:00 am ET, Fed Chair Jerome Powell will deliver a speech
titled "Challenges for Monetary Policy" at the Jackson Hole
Economic Policy Symposium in Wyoming.
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