Greenback loses steam ahead of Jackson Hole

It was an interesting night in the FX space as disjointed moves continued to dominate trade.

The stellar run in USD/JPY continued overnight, with the pair rallying ¥98.81. The pair had been struggling for a while as the USD underperformed, but it certainly seems to have come back to life. We will be eyeing a potential move to ¥100 in the short term, with the Jackson Hole meeting over the weekend likely to be a potential catalyst for further USD strength.

For the first time in 25 years, the Fed chairman will not be attending the Jackson Hole meeting. While many feel this means Jackson Hole will be a non-event, there are still plenty of opinionated Fed members who could voice opinions on the QE situation. We wouldn’t be surprised to hear comments that continue to steer tapering expectations for September/October.

Apart from Jackson Hole, the only significant piece of data to look out for will be new home sales data. The market is looking for a 487,000 rise in new home sales, which is slightly lower than the previous 497,000 reading.

Looking towards the risk space, the sterling and the euro remained offered against the greenback while the AUD maintained its momentum from the China PMI data. AUD/USD is back above 0.90 and just holding on, with risk sentiment somewhat improved in the short term. We feel it is crucial for the pair to hold this 0.90 level to prevent a further loss of confidence in the short term.

EUR/USD is sidelined at 1.335 and hasn’t really gained any traction from yesterday’s positive PMI readings.

This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.

CFD’s zijn complexe instrumenten en brengen vanwege het hefboomeffect een hoog risico mee van snel oplopende verliezen. 79% van de retailbeleggers lijdt verlies op de handel in CFD’s met deze aanbieder.
Het is belangrijk dat u goed begrijpt hoe CFD's werken en dat u nagaat of u zich het hoge risico op verlies kunt permitteren.
CFD’s zijn complexe instrumenten en brengen vanwege het hefboomeffect een hoog risico mee van snel oplopende verliezen.