Yellen will speak Friday from the Fed’s summer retreat at 10 a.m. But on Friday, Fed chairwoman Janet Yellen could offer a strong hint that higher borrowing costs in the world’s largest economy are on the cards when she delivers a speech at the annual get-together for central bankers in the mountain resort of Jackson Hole, Wyoming. While minutes of the last Fed meeting show a lively debate about the appropriate pace of tightening, if Yellen’s speech dwells on the issue of a progressively lower natural interest rate, then the dollar will likely continue to weaken, according to the FX team.
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The Commerce Department reports on new-home sales for July.
To be fair, Matus thinks the USA central bank won’t issue the “set” warning until its September meeting policy statement and then “go” at the December meeting. Based on recent communications by San Francisco Federal Reserve President John Williams, Board Governor Jay Powell, and former Fed Chair Bernanke, we believe the discussion at Jackson Hole will take place amid greater acceptance that potential growth has slowed and the neutral rate of interest has fallen (Figure 3).
Palladium was down 1.04pc at $705.47, after hitting an one-week high of $717.70 on Thursday. Fischer said the US labor market has been “remarkably resilient” despite several shocks from overseas. Although Fischer did not say it, the suggestion is that with the Fed so close to its goals, it no longer has to keep monetary policy so loose and can snug up interest rates. Investors will be listening closely to gauge the likelihood of a rate hike in September.
Fed Chair Janet Yellen is scheduled to speak; gross domestic product; worldwide trade; consumer sentiment; corporate profits.
On this weekly chart we can see that USD/CHF bottomed at 0.7417 level and after that started to rise.
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New home sales; earnings from Best Buy.
