Solid Gold Berjangka | Dollar Gains Intact as Traders Eye Jackson Hole
The dollar began on a firm footing on Monday, following five straight weeks of gains, as investors looked ahead to Federal Reserve’s Jackson Hole symposium for a guide on where rates might settle when the dust of this hiking cycle clears.
The dollar made a gain of 0.7% on the euro last week, inched ahead on the yen and surged by more than 1% on the Antipodean currencies as U.S. Treasury yields leapt in anticipation of interest rates staying higher for longer.
In early trade, the Australian dollar , steady at $0.6409, was just above last week’s nine-month low of $0.6365 and the New Zealand dollar was pinned at $0.5923, also uncomfortably close to last week’s low of $0.5903.
They have suffered a double blow lately as in both countries central banks have indicated they are on hold, and both are exposed, via exports, to China where market fears about the slowing economy have swelled as property problems deepened.
China vowed financial support on the weekend to resolve local government debt problems but details were light and in the absence of more concrete promises traders are starting to lose faith that Beijing will ride to the rescue.
For China the focus on Monday is on an expected cut to lending benchmarks. The yuan steadied at 7.3084 per dollar in offshore trade, having bounced off last week’s lows when state banks stepped in as buyers during London and New York hours.
The yen is also on intervention-watch, having fallen to levels around which authorities stepped in last year. It was steady at 145.19 per dollar in early trade.
The euro held at $1.0883. Sterling hovered at $1.2738. The Swiss franc was just above a six-week low made last week at 0.8817 per dollar.
Apart from waiting for news of stimulus in China, the upcoming Jackson Hole symposium – where Fed chair Jerome Powell is due to speak on Friday – is markets’ major focus and may set the direction for U.S. yields.
Source : Reuters
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