Warsh Speech Risks Asymmetric USD Reaction

The US Dollar has stabilized after last week's setback and managed to appreciate slightly against most currencies. However, its performance will be put to the test today with Kevin Warsh's speech in Jackson Hole.

Baur from Commerzbank expects little forward guidance on a September rate hike but notes that potential discussion of changing the Fed's inflation measure away from the PCE deflator could be read as dovish for the Dollar.

This would likely nip rate hike expectations in the bud and have a negative impact on the US dollar, making it come under pressure.