The markets focus for today will be the Jackson Hole Symposium and Fed Chair Jerome Powell’s speech. The Federal Reserve Bank of Kansas City will hold its 45th annual Economic Policy Symposium virtually this year, as opposed to in its traditional Jackson Hole setting in Wyoming. The forum will bring together US central bankers, private economists, policymakers, academics, government officials, and news media to discuss common issues and challenges relevant to today’s current market and political climate. The main points of discussion include monetary policy, agriculture, public policy, and financial stability in global economies.
In what has been as described one of the “the most anticipated speeches of his career”, Jerome Powell is expected to provide important clues on when policymakers will begin to dial back monetary policy stimulus. Fed officials have been building expectations since April for a reduction in its $120 billion a month of bond purchases that have kept US interest rates pinned near historic lows for 18 months. It has been well documented that “numerous Fed Presidents and board members over the past three months have suggested that the economy is sufficiently revived to begin the taper”. The lack of clarity on the future of the US economy and the potential damage some risks may inflict is weighing heavy on the Greenback, Dollar bulls can hope the Fed will reinvigorate USD with today’s event.
COVID-19 troubles are still posing as a significant hinderance to Sterling. The spread of the COVID-19 Delta variant is rampant in the UK despite a largely successful vaccine program. The percentage of the UK population over the age of 16 who have had two vaccination doses is just under 88%, while over 77% have had a single jab. Despite this being a success, the Delta variant is seeing a substantial rise in new cases with nearly 36k people testing positive on August 24, bring the rolling 7-day total up to just under 237k cases.
GBPUSD opened the day yesterday at 1.3754 and struggled to maintain any momentum. Cable finally closed the session at 1.3714.
GBPEUR also made a loss on Thursday. The pair opened at 1.1690 and closed at 1.1667.
Similarly, EURUSD made a minor loss yesterday. Starting the session at 1.1765 the pair went on to close at 1.1754.