Daily thread to exchange ideas and to share your thoughts
Happy Friday, everyone! Hope you're all doing well as we get things going here on the session. It's been a relatively quiet start to the European morning session and I reckon it'll stay that way ahead of the Jackson Hole symposium taking place later today.
The kiwi is more buoyed after less dovish comments by RBNZ governor Adrian Orr earlier on while the dollar is holding firmer amid higher Treasury yields on the session.
The key spot to watch for in all of this will be the bond market and should Fed officials temper with market expectations of the September FOMC meeting, expect the reaction there to be the most noticeable and key for dollar and risk pricing.
As such, USD/JPY will be one of the main pairs to watch going into the weekend so let's see if the Fed will disappoint or surprise.
I think if anything else, Powell will maintain a more vague tone in his speech later. This is the one chance for the Fed to seize back control of their decision-making from markets so he may still allude to possible rate cuts as being a part of the "mid-cycle adjustment".
However, I doubt he will give markets a clear signal on whether one will come about in September. As such, it may be more prudent to keep an eye out on other Fed officials to see if they will have anything to offer.
What are your views on the market right now? Share your thoughts/ideas with the ForexLive community here.
