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25.08.2023 Market Report


EUR/USD is trading under pressure below 1.0800 on Friday’s European morning. The US Dollar attracts safe-haven flows, as investors turn cautious ahead of the speeches from Fed Chair Powell and ECB President Lagarde at the Jackson Hole Symposium. German IFO coming up next. 


GBP/USD is losing ground toward 1.2550 in the European morning. The pair respects the broad US Dollar strength ahead of the central bankers’ showdown at the annual Jackson Hole Symposium. Reduced bets for a 6% BoE peak rate also add to the weight on Cable. 


USD/JPY struggles to defend the mid-week recovery from the lowest level in a fortnight, easing to 145.90 amid early Friday morning in Europe. In doing so, the Yen pair portrays the market’s cautious mood ahead of the speeches from the Bank of Japan (BoJ) and the Federal Reserve (Fed) leaders at the annual Jackson Hole Symposium.


AUD/USD trades lower around 0.6410 during the Asian session on Friday, reversing from the weekly top. The pair experiences downward pressure due to upbeat United States (US) economic data overall, elevated US Treasury yields, and mixed sentiment around monetary policy tightening by the US Federal Reserve in the September meeting. Additionally, fading US-China optimism coupled with China’s economic challenges exert pressure on the Australian Dollar (AUD) as a result of the intricate export-trade ties between the two nations.


NZD/USD extends its losses, trading lower around 0.5920 during the Asian session on Friday. The pair experiences downward pressure due to upbeat United States (US) employment data released on Thursday. The US Initial Jobless Claims indicated positive employment conditions, which raises the concerns over inflation scenario in the US. For the week ending on August 18, the index dropped to 230K from the previous reading of 240K, which was expected to remain consistent.


The USD/CAD pair gains some follow-through positive traction for the second successive day on Friday and climbs back closer to its highest level since May 31 touched earlier this week. Bulls now await a sustained strength and acceptance above the 1.3600 mark before placing fresh bets, though the setup warrants some caution.

The US Dollar (USD) climbs to over a two-and-half-month peak during the Asian session and remains well supported by growing acceptance that the Federal Reserve (Fed) will keep interest rates higher for longer. This, in turn, is seen as a key factor pushing the USD/CAD pair higher. That said, a further recovery in Crude Oil prices, from a one-month trough set on Thursday, could underpin the commodity-linked Loonie and act as a headwind for the major. Traders might also prefer to wait on the sidelines ahead of Fed Chair Jerome Powell’s highly-anticipated speech at the Jackson Hole Symposium.


The USD/CHF pair extends its upside for the second consecutive day above the mid-0.8800s during the Asian session on Friday. Meanwhile, the US Dollar Index (DXY) surges above the 104.20 mark supported by the higher US Treasury yields and risk-off mood in the market ahead of the key event.

Philadelphia Federal Reserve (Fed) President Patrick Harker stated at the Jackson Hole Symposium that the central bank has probably done enough with restrictive monetary policy. He also said that he believes the Fed will remain interest rate stable this year, but that next year would depend on the data. While, Boston Fed President Susan Collins said further rate rises are possible and that sending a strong signal regarding the timing of rate cuts is premature. Market participants await Friday’s speech from Fed Chairman Jerome Powell at the Jackson Hole Symposium for fresh impetus. Hawkish comments from the officials could boost the USD and act as a tailwind for the USD/CHF pair.


Oil prices moved little in Asian trade on Friday, coming under pressure from a stronger dollar as traders hunkered down ahead of more cues on U.S. monetary policy from the Federal Reserve Chairman.


Gold price is taking a breather early Friday, consolidating a four-day uptrend to two-week highs of $1,923 set on Thursday. The United States Dollar (USD) is taking charge amid risk-aversion, extending its previous rally, helped by the renewed strength in the US Treasury bond yields. 

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