USD Extends Gains Amid Broader Weakness

The US Dollar (USD) extended its gains for the second day in a row, trading at around 17,790 during European hours on Monday. However, this upward momentum is being capped by broader USD weakness.

Goldman Sachs chief economist Jan Hatzius reiterated his forecast that the Federal Reserve will hold interest rates steady in September. He noted that while Federal Reserve Chair Kevin Warsh delivered hawkish remarks at the Jackson Hole symposium, these words are unlikely to trigger an immediate rate hike unless August CPI and PPI reports show an unexpected spike in inflation, a scenario Goldman Sachs views as unlikely.

During the Jackson Hole address, Fed Chair Warsh maintained a cautious stance on monetary policy, emphasizing that central bankers still have work to do to ensure cost-of-living pressures subside for Americans. He stressed that the Fed needs clear evidence of underlying inflation moving quickly toward its target before declaring victory, leaving the door open for potential policy tightening if future inflation data fails to cool as expected.

Bank Indonesia's new governor, Destry Damayanti, has pledged to prioritize both growth and stability while maintaining the central bank's independence. Market focus in Indonesia is now turning to upcoming domestic economic indicators set for release this week, specifically the August inflation figures and July trade data.