Dollar holds near weekly high ahead of Fed Chair Warsh’s speech
The U.S. dollar changed little in early Asian trading on August 28, holding near a one-week high against major currencies. Investors awaited Federal Reserve Chair Kevin Warsh’s debut speech at the Jackson Hole symposium in Wyoming, which could provide signals about his approach to monetary policy.
Channel NewsAsia, citing Reuters, reported on the situation in the foreign exchange market. The dollar index, which measures the currency against six major currencies, stood at 99.13. It rose 0.3% for the week, but was headed for a second consecutive monthly decline of 0.7% in August.
Major currency rates
The euro traded near $1.1652, while the pound sterling stood at $1.3597. Both currencies were near one-week lows against the dollar but were headed for a second consecutive monthly gain.
The Japanese yen was little changed at 159.34 yen per dollar. It partly gave back gains linked to currency interventions, but was still headed for a monthly strengthening of 1.3%. The Australian dollar rose nearly 0.1% to a three-month high of $0.72, while the New Zealand dollar added 0.2% to $0.5960.
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Expectations for Fed policy
Market participants watched Warsh’s speech, particularly for possible signals on curbing inflation. At the same time, these expectations were constrained by his position against providing clear forward guidance on interest rates. Some other Fed officials also expressed concern about inflation in the United States on August 27 and signaled that they were open to raising rates.
Traders put the probability of a rate hike at the Fed’s September meeting at about 35%, and at 75% by December. The yield on benchmark 10-year U.S. government bonds stood at 4.676%.
U.S. Treasury Secretary Scott Bessent said the department would increase purchases of long-term bonds. According to Reuters, this heightened concerns that attempts to lower borrowing costs could weaken the dollar.
