What to watch for on Tuesday, August 30:
The dollar started the week strong, but ended the day with modest losses across the currency board. Market traders were caught between recession fears and hawkish politicians hinting at tighter monetary policies.
Following the Jackson Hole Symposium, the odds of a 75 basis point US Federal Reserve rate hike jumped above 70%, according to CME’s FedWatch tool, while across the pond, Market traders now see the odds of a similar rise in Europe at 67%, up from 48% on Friday.
The macroeconomic calendar was scant, although encouraging US data capped the gloomy mood during US trading hours, helping Wall Street trim most of its early losses.
Government bond yields, by contrast, rose, with European indices soaring on advice from ECB officials.
The President of the European Commission, Ursula von der Leyen, once again put the energy crisis on the table by reporting that the EU is preparing an emergency intervention in its energy market to lower the skyrocketing electricity prices
EUR/USD is struggling around parity, while GBP/USD settled just above 1.1700 after falling to a two-year low of 1.1647. AUD/USD advanced towards 0.6900, while USD/CAD eased and is currently trading around 1.3000. Haven currencies were little changed against the dollar, with USD/CHF trading around 0.9680 and USD/JPY at 138.70.
Gold posted modest intraday gains to settle at $1,737 a troy ounce, while crude oil prices strengthened, with WTI now trading around $96.90 a barrel.
Source: Fx Street
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