Dollar Steadies Ahead of Warsh Speech at Jackson Hole
The US dollar held firm near its one-week high against major peers on Friday as investors awaited Federal Reserve Chairman Kevin Warsh's speech at the Jackson Hole symposium.
Warsh's debut speech in Wyoming was set for 1400 GMT, and market participants were eager to hear his comments on monetary policy and the US Treasury's effort to bring down long-term borrowing costs during a period of volatility in bond markets.
The euro and sterling were slightly weaker against the greenback, last trading at $1.165 and $1.358, respectively. Both currencies were set for their first weekly drop in a month.
Volkmar Baur, an FX & commodity analyst at Commerzbank, noted that Warsh has emphasized the Fed's 2% inflation target but never explicitly mentioned the PCE deflator. This could indicate that the Fed is considering applying a different measure of inflation, which would likely nip rate hike expectations in the bud and be interpreted as a dovish signal.