Dollar Steady as Investors Await Warsh's Jackson Hole Debut

The US dollar held steady near its one-week high against major peers on Friday as investors awaited Federal Reserve Chair Kevin Warsh's speech at the Jackson Hole symposium for clues on his policy outlook.

Market participants are keenly awaiting Warsh's debut speech in Jackson Hole, Wyoming, slated for 1400 GMT, for insights into how he would approach monetary policy, inflation, and recent volatility in bond markets. However, expectations were tempered by his opposition to providing explicit forward guidance on rates.

Citi analysts noted that markets are in 'wait-and-see mode' ahead of Warsh's speech, with any sign of policy alignment between Warsh and Treasury Secretary Scott Bessent potentially reinforcing expectations of lower curve volatility and weighing on the USD. The latest US inflation data shows price pressures persisted, boosting investors' bets on a Fed rate hike next month.

Traders were pricing in roughly 35% odds of a hike at the Fed's September meeting, rising to 75% by December. Treasury yields remain elevated ahead of the meeting, with those on benchmark US 10-year notes last at 4.68%. Bitcoin briefly climbed above $81,000 before paring gains.