US Dollar's Mixed Start and Powell's Hawkish Stance

After touching a multi-month maximum at the end of last week, the US dollar started the week on the back foot and continued to edge down during early Tuesday trading. However, the greenback’s losses have been small, and the dollar is still close to last week’s maximums. Jerome Powell left a clear message when he spoke at the Jackson Hole symposium, saying that inflation remains a problem and leaving the door open for further interest rate hikes. This moderately hawkish stance is positive for the dollar, and we should not be reading too much from this early week softness, which is likely to be the result of some traders locking in gains ahead of the release of important US economic data this week, including consumer confidence, GDP, and employment.

Ricardo Evangelista – Senior Analyst, ActivTrades