Dollar on the back foot ahead of FOMC minutes and Powell’s Jackson Hole speech
The Dollar has started the new week on a softer note ahead of Wednesday’s FOMC minutes, which are expected to show a dovish Fed outlook, as well as Friday’s speech from Jerome Powell at the Jackson Hole Symposium. Markets are pricing in a 25bps cut in September with an outside chance of a 50bps cut, while a further three cuts this year are now expected. The DXY index is down at 102.20, with the Euro trading at 1.1042, the Pound at 1.2956, and the Yen at 145.94. Risk sentiment has improved as recession fears in the US ease. The Rand continues to lead EM currencies stronger with the local currency consolidating its break below the R18.00 level as it starts the new week at R17.83. The Rand move is now getting into a short-term technical overbought position as we head to the 10th consecutive day of gains. Traders will also be watching Wednesday’s local CPI data for clues as to whether the SARB will cut rates at next month’s MPC meeting.
Gold hits a new all-time high
Gold touched a new record high of $2,509.65 earlier this morning on the back of the prospects of deeper US rate cuts growing, and the Dollar softening. Platinum is trading flat this morning but Palladium has lost over 1.0%. Brent crude remains stuck below the $80.00 level on the back of demand fears and hopes of a peace deal in the Middle East.
