Dollar drifts lower as traders brace for the Fed's Jackson Hole address
The greenback eased against major peers on Thursday as investors positioned ahead of this week's Jackson Hole symposium, where the Fed chair is expected to signal the path for September policy.
The US dollar slipped against a basket of major currencies on Thursday as traders squared positions ahead of the Federal Reserve's annual Jackson Hole symposium, where the central bank chief is due to speak on Friday.
The dollar index, which tracks the greenback against six major peers, eased toward 97.50, extending a gentle decline that has taken hold over the past week as rate-cut expectations for September firmed up.
Fed funds futures now price in better than an 80% probability of a quarter-point cut next month, up from around 65% at the start of the week, after a run of softer labour-market readings.
Strategists say the Jackson Hole speech will be scrutinised for any pushback against those bets, or confirmation that the central bank is comfortable moving ahead given inflation's gradual cooling.
Key Takeaways
- The dollar index (DXY) slipped toward the 97.50 area in early trading.
- Fed funds futures now imply better than 80% odds of a September rate cut.
- All eyes turn to the Fed chair's keynote speech on Friday at Jackson Hole.
- EUR/USD and GBP/USD both firmed modestly on the softer greenback.
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