Dollar recovers after Bullard’s comments in Jackson Hole

• The price of the Dollar rises while Bullard gives statements on Bloomberg TV.
• Traders will be watching for headlines ahead of the Jackson Hole Symposium on Thursday.
• The strength of the Dollar Index faded after the weak US PMI numbers.

He US dollar (USD) It was back to square one after Wednesday’s loss, although shortly before this article, former US Fed staffer James Bullard repeated that the reacceleration could push inflation up, leaving the Fed unable to cut short term. On the eve of Jackson Hole, these last few days there have been sudden movements that must have hurt both parties who were trying to take positions before the main event that will take place this Thursday and Friday with the annual Symposium of the Federal Reserve (Fed) in Jackson Hole . The crème-de-la-crème of central bankers from developed countries will meet to discuss and assess what to do next with these high rates and inflation that is not yet close to its intended target.

A slew of data is set to be released on Thursday, with the risk that, following the contraction of the latest US PMI on Wednesday, this afternoon’s durable goods data could further dampen the recent positive tone and dampen economic confidence in the US. Joined. At 14:00 GMT the Jackson Hole Symposium will begin. Therefore, we will have to be attentive to any comments from non-Fed central bankers who make statements that could trigger a substantial movement of other currencies against the Dollar. Traders are preparing for an eventful 48 hours.

Daily Recap: The Dollar Will Be Everywhere

• In an interview with Bloomberg television to kick off the annual Jackson Hole symposium, former Fed member James Bullard repeated that the reacceleration could push inflation up and thus make it impossible for the Fed to start cutting rates. short-term rates. The US dollar jumps in an immediate reaction and the DXY is back in the green for this Thursday.
• All eyes are on the headlines from Jackson Hole around 14:00 GMT, with several top central bankers from developed countries lined up to make comments and possibly hint at crucial changes to their monetary policy. It is to be expected that the repercussions will not only be limited to the Dollar, but also to other currencies.
• Before the Fed Symposium begins, at 12:30 GMT, a host of data will be released, the most important of which is US Preliminary Durable Goods Orders for July. The expectations are: excluding transportation, from 0.5% to 0.2%; excluding 6% defense, without provision; and the general index of goods orders, from 4.6% to -4%.
• As if that were not enough, weekly unemployment data will also be released at 12:30 GMT, with initial claims rising from 239,000 to 240,000. Continuing requests are expected to rise from 239,000 to 240,000. On the other hand, continued requests are expected to rise from 1,716M to 1,708M.
• This Thursday’s data will close out with Kansas Fed manufacturing activity holding steady at -11 to -10.
• This Thursday, the US Treasury will auction a 4-week bill and a 30-year TIPS issue.
• The BRICS convention invites Saudi Arabia and other countries to join the bloc.
• Stocks are trading higher broadly after Nvidia’s earnings substantially exceeded expectations after the close of the US session on Wednesday. Japan’s Topix Index is up 0.40% at the close, and Hong Kong’s Hang Seng Index is up nearly 2%. In Europe, stock markets are in the green overall, around 1%. In US futures, the Nasdaq is leading the gains, up 1.2%.
• CME Group’s FedWatch tool shows that markets are pricing the chance that the Federal Reserve will keep interest rates unchanged at its September meeting at 86.5%.
• The 10-year US Treasury yield is trading at 4.19%, after hitting a new yearly high on Thursday. The bond market will be very sensitive to any news on Thursday and Friday at the Jackson Hole Symposium. The entire US yield curve could move up or down depending on Fed Chairman Jerome Powell’s speech.

Dollar Index Technical Analysis: Bullard Raises DXY Sentiment

The dollar was about to reach the area of ​​104 on the Dollar Index (DXY) before suffering the contraction of the US PMI figures. The DXY slumped like a failed Jello pie and closed Wednesday in the red. Although the dollar bears shouldn’t brag about their success just yet, the DXY bulls are consolidating their positions well above the 200-day SMA ahead of the next attempt to reach 104 points.

On the upside, as you may have guessed from the previous paragraph, 104.00 is the first close target. Friday’s high at 103.68 is vital and needs a daily close above for the DXY to make more monthly gains. If this dollar strength persists through the latter part of the year, the May high at 104.70 could once again be a reality.

On the downside, there are several bottoms that could prevent a steep drop in the DXY. The first is the 200-day SMA at 103.16, which has already been broken on Monday and Tuesday, although it did withstand Wednesday’s implosion. Going below 103.00 opens up some room for a further drop. However, around 102.38, both the 55-day and 100-day SMAs look to support the pair.