– Fed Chair Powell’s Jackson Hole speech highly anticipated
– Modest positive risk tone lingering in markets
– US dollar gives back some of this weeks gains
USDCAD Snapshot open 1.2931-35, overnight range 1.2925-1.2957, close 1.2924, WTI oil $93.62, Gold $1749.93
The Canadian dollar is close to the top of this week’s range as traders patiently await the details of Fed Chair Jerome Powell’s speech from Jackson Hole, Wyoming.
The 10:00 am ET remarks are expected to shed some light on the Fed’s monetary policy outlook. He is likely to be hawkish, judging by the remarks from several policymakers yesterday.
Atlanta Fed President Raphael Bostic is undecided as to whether to hike 50 or 75 basis points. He is concerned about the high level of inflation but is hoping it has peaked.
Kansas City Fed chief Ester George said hiking rates above 4.0% is not out of the question and pointed out that the current fed funds level is not restrictive.
USDCAD traded in a 1.2931-1.2957 range overnight but dropped in in NY trading reaching 1.2920 after the PCE price index data was a tad weaker than expected.
Asia equity indexes closed with gains following Wall Street’s lead but European traders were more cautious. The Major European bourses are flat to negative. S&P 500 futures are down 0.48% while DJIA futures are down 0.35%. WTI oil rose 1.3% from the close and gold fell 0.69%. The US 10 year Treasury yield is steady at 3.075%.
EURUSD traded in a 0.9975-1.0023 range. the single currency is struggling to get upward traction against the backdrop of a looming recession, energy crisis, and the war in Ukraine. Nevertheless, traders were sidelined awaiting Powell’s speech.
GPBUSD traded in a similar fashion to EURUSD. Prices dropped to the session low of 1.1777 in Asia then rebounded to 1.1844 just as NY opened.
USDJPY is consolidating earlier gains in a 136.44-137.12 range, underpinned by firming US Treasury yields.
AUDUSD and NZDUSD are consolidating this week’s gains, underpinned by the improved risk tone following the Chinese stimulus package news on Thursday.