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US Dollar Steady as Markets Look to Fed’s Annual Symposium

Early on Monday, the US dollar is trading mostly unchanged against its major peers as markets await updates from the Fed’s Jackson Hole symposium on how the monetary policy of the US could develop in the near future. At the time of writing, the US dollar index DXY is trading around 93.24.

Later this week, Fed chairman Jerome Powell is expected to shed light on the monetary policy at the annual event. Despite the monetary easing measures and fiscal stimulus by the government, economic recovery has been delayed further as the number of infections continue to rise, driving significant uncertainty in global financial markets.

After weakening to a two-year low over the past few sessions, the dollar recovered some strength last week over encouraging economic data releases, including an uptick in business activity and home sales. In addition, the greenback’s safe haven appeal came back into the spotlight amid rising uncertainty about economic recovery following the coronavirus pandemic.

However, analysts caution that the bullish moves in the US dollar could be temporary as the currency is unlikely to make gains as long as the downturn in the US economy continues. Meanwhile, the Fed has also signaled its intentions to remain dovish for longer time, exerting more downward pressure on the reserve currency.

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Arslan Butt
Index & Commodity Analyst
Arslan Butt serves as the Lead Commodities and Indices Analyst, bringing a wealth of expertise to the field. With an MBA in Behavioral Finance and active progress towards a Ph.D., Arslan possesses a deep understanding of market dynamics.His professional journey includes a significant role as a senior analyst at a leading brokerage firm, complementing his extensive experience as a market analyst and day trader. Adept in educating others, Arslan has a commendable track record as an instructor and public speaker.His incisive analyses, particularly within the realms of cryptocurrency and forex markets, are showcased across esteemed financial publications such as ForexCrunch, InsideBitcoins, and EconomyWatch, solidifying his reputation in the financial community.
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