Risk event for the week starting 21 August: USD on Jackson Hole symposium
The central bankers’ get-together could provide a trading opportunity for the US dollar, according to DailyFX analyst Warren Venketas. He suggests that a hawkish message could provide an opportunity to sell the dollar basket.
(Video summary)
Jackson Hole Economic Symposium
The big event to keep an eye on this week is the Jackson Hole Economic Symposium. It's a gathering where experts talk about the US economy, specifically the value of the US dollar.
Right now, the US economy is doing pretty well. Inflation is rising, but not as fast as the Federal Reserve (Fed) wants it to. However, the job market is strong, with fewer people filing for unemployment recently.
Jerome Powell
One thing to watch for at the conference is what Jerome Powell, the head of the Federal Reserve, has to say. If he gives a "dovish" message, meaning he's cautious about raising interest rates, it could cause the US dollar to drop in value.
USD trading patterns
Technically, the US dollar is at an important point in terms of its trading patterns. It's currently around the 200-day moving average and the 103.60 swing high. There's still a chance it could go up some more, maybe hitting 104. But some traders might get nervous and start selling at that point, causing the dollar to drop back to 103.60.
If Powell announces a more "accommodative" monetary policy, meaning he's planning to keep interest rates low, the US dollar could drop even further, maybe hitting around 102.50.
Overall, this week is expected to be a bit more volatile in the trading world because of the Jackson Hole Symposium. Traders will be closely watching what Powell says, because it could have a big impact on how the US dollar performs.
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