All eyes on Jackson Hole
The US dollar’s recent weakening trend, which has pushed the world’s most traded currency to three-month lows, will be tested tonight when Federal Reserve Chair Kevin Warsh delivers a key speech.
Warsh is speaking at the Jackson Hole Symposium, the annual gathering of central bankers held in the Rocky Mountains.
Financial markets will be looking for greater clarity on the Fed’s plans to contain inflation, particularly after this week’s PCE inflation figures came in above expectations.
Ahead of the speech, the US dollar was mostly weaker, with the Australian dollar leading gains. AUD/USD rose 0.3% and climbed to its highest level in more than three months. NZD/USD gained 0.1%.
Warsh speaks at midnight AEST.
Aussie hits three-month highs on spending surge
Australian household spending rose a stronger-than-expected 1.1% m/m and 7.0% y/y, with prior readings revised higher.
The data reinforced signs of resilient consumer demand and added to the positive sentiment around the Australian economy. While Q2 capital expenditure was softer, business investment intentions for 2026-27 were 15% higher than previously estimated, pointing to stronger activity ahead.
AUD/USD is approaching overbought territory on the RSI which can sometimes precede a reversal lower. Initial support is seen at the 21-day EMA of 0.7097, followed by the 50-day EMA at 0.7058. On the upside, the next key resistance level is 0.7250.
Meanwhile, AUD/NZD rose to a one-week high.
BoJ keeps rate hike hopes alive
BoJ Deputy Governor Ryozo Himino gave little indication policymakers are pushing back against expectations of a possible September rate hike.
Speaking in Saitama, he said that as underlying inflation moves closer to the 2% target, greater attention should be paid to upside price pressures, including the inflationary effects of a weaker yen. Himino reiterated that policy decisions will depend on economic conditions, inflation trends and financial developments at each meeting.
Overnight in Asia, moves were more subdued, with USD/JPY and USD/SGD little changed.
USD/CNH remains near a three-year low. A move above the 21-day EMA at 6.7389 could open the door to a test of the 50-day EMA at 6.7589. On the downside, psychological support is located at 6.7100.
Aussie hits three-month highs
Table: seven-day rolling currency trends and trading ranges
Key global risk events
Calendar: 24 – 29 August
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*The FX rates published are provided by Convera’s Market Insights team for research purposes only. The rates have a unique source and may not align to any live exchange rates quoted on other sites. They are not an indication of actual buy/sell rates, or a financial offer.
