USD Strength Ahead of Jackson Hole: Can Warsh Deliver Forward Guidance?

The US dollar continues to strengthen in the short term, with a higher-low support hold leading into a bounce. However, this trend looks corrective in nature and aligns with the bigger picture of USD-strength. The USD/JPY pair remains crowded with bulls unable to break above 160.00.

Heading into the Jackson Hole Economic Symposium, hopes are high that Kevin Warsh will provide some forward guidance on economic performance. At his last meeting in June, markets got a shock, resulting in USD-strength and weakness in stocks. This helped drive the $4k test in spot Gold and rates markets.

Warsh has reiterated that the bank's primary focus is to fight inflation, which hasn't been below target on an annualized basis since 2021 and 2022. With Core PCE coming in at 3.3%, there's still no call for victory laps yet with mid-terms just two months away.

With a roughly 72% probability of a rate hike by the end of this year, expectations can shift should Warsh echo an evasive tone. However, it's more important to see what happens regarding the USD/JPY pair as that market continues to cast a massive sway over the larger USD complex.