This is what you need to know to trade today monday august 29:
Following FOMC Chairman Jerome Powell’s speech at the Jackson Hole Symposium on Friday, the Dollar Index gained strength and posted weekly gains. The index started the new week on a strong note and reached its highest level in two decades near 109.50. There will be no big-ticket releases on Monday and risk perception coupled with the market’s assessment of the Fed rate outlook could continue to drive market action. At press time, US stock index futures were down between 0.7% and 1.15%.
Delivering his keynote address on Friday, Powell reiterated that restoring price stability will likely require maintaining a restrictive policy for “some time.” As for the September rate decision, Powell said the magnitude of the rate hike will depend on the totality of the data since the July policy meeting. In turn, CME Group’s FedWatch tool showed the probability of a 75 basis point (bp) rate hike rising to 70% from 40% early Friday.
Over the weekend, European Central Bank policymakers struck a hawkish tone at the Jackson Hole Symposium, but the shared currency failed to start the new week on a bullish note. ECB Governing Council member Francois Villeroy de Galhau said the ECB needs another significant interest rate hike in September. ECB policy chief Olli Rehn said the euro’s exchange rate was an “important consideration” in setting monetary policy. Finally, Isabel Schnabel, a member of the ECB’s Governing Council, argued that they had no choice but to continue on the path of normalisation, even if the Eurozone entered a recession. The EUR/USD is losing 0.3% on the day to trade at 0.9935.
During Asian trading on Monday, data from Australia showed that retail sales rose 1.3% month-over-month in July, beating market expectations for a 0.3% gain. The pair AUD/USD failed to benefit from the encouraging data and fell towards 0.6850.
Driven by rising US Treasury yields, the USD/JPY reached its highest level in more than a month, at 139.00, early Monday. The 10-year US Treasury bond yield rose 2.3% on the day to 3.11%.
The Prayed remains under heavy bearish pressure in early morning Europe and approaches $1,720 on Monday.
After Friday’s sale, the Bitcoin remained under bearish pressure over the weekend and fell below $20,000. Although BTC/USD has staged a bounce early on Monday, it is still trading below 20,000. After losing more than 10% on Friday, ethereum it extended its decline and hit its lowest level in a month around $1,400 on Sunday. ETH/USD is rising in the European morning, trading below $1,500.
Source: Fx Street
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