Euro Tumbles Below 1.1650 as Markets Await Jackson Hole Insight

The Euro has resumed its downward trend against the US Dollar on Friday, with investors bracing for Federal Reserve Chairman Kevin Warsh's speech at the Jackson Hole Symposium. The EUR/USD pair trades near 1.1640 in the early European session, on track for a 0.3% weekly decline after rallying about 2.5% over the previous four weeks.

Market strategists are awaiting insight into the Fed's plans to tame above-target inflation at Jackson Hole. Kansas Fed President Jeffrey Schmidt said that 'inflation is still sticky and we've got to continue to find ways to break through,' while Cleveland Fed President Beth Hammack reiterated that it is 'time to act' on interest rate hikes.

US Personal Consumption Expenditures (PCE) Prices Index figures revealed that consumer inflation accelerated 0.2% in July, above the 0.1% expected, and that the yearly rate grew at a steady 3.7% rate, almost twice the Fed's 2% target.

Scotiabank strategists view the current US Dollar recovery as corrective, warning that markets may be 'a little complacent' about Warsh's speech and its potential impact on markets.