Dollar Gains Modestly After Jackson Hole Speech

The US Dollar has seen a modest gain since Fed Chair Warsh's speech at Jackson Hole, but some of that move retraced yesterday. The US Dollar Index (DXY) is up around 0.3% since Friday's open, while 2-year Treasury yields have sharply higher.

MUFG's Derek Halpenny notes that the emphasis on inflation not falling at sufficient speed has shifted risks toward a hike, but recent caution from the FOMC and upcoming NFP and CPI data could still justify holding rates, limiting aggressive Dollar buying.

The decision remains a close call ahead of the key economic releases. With front-end yields moving higher globally and an elevated degree of uncertainty given the busy month of central bank meetings, the dollar buying has been curtailed.