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2 min read . Updated: 23 Aug 2021, 11:48 PM IST
The euro’s current gains against the dollar may not extend much further, Saxo Bank says. It is “far too early" to call the current rise in EUR/USD a reversal of the exchange rate’s recent depreciation, Saxo Bank’s forex strategist John Hardy says. A firmer rally of EUR/USD toward 1.1800 that sticks after Federal Reserve Chairman Jerome Powell speaks at the Jackson Hole symposium on Friday is needed to suggest the sub-1.1700 lows of last week mark a cycle low, he says. “Until then, the 1.1600 and 1.1500 levels are potential targets to the downside, with 1.1290 the ultimate area." EUR/USD rises 0.3% to 1.1732. (renae.dyer@wsj.com)
Dollar’s Declines Likely to Remain Limited Before Jackson Hole Summit
1454 GMT - The dollar’s declines are likely to remain limited before Federal Reserve Chairman Jerome Powell speaks at the Jackson Hole symposium on Friday, ING says. Ahead of the speech, which could provide clarity on the timing of tapering asset purchases, investors probably won’t want to heavily add to positions in risky assets and the dollar won’t sell off “too much," ING analysts say. “The DXY dollar index may soften a little further today if equity markets continue their recovery, but we suspect DXY buyers may return in the 93.20 area," they say, referring to the dollar’s safe-haven status. The DXY dollar index falls 0.5% to 93.0790.(renae.dyer@wsj.com)
Hungarian Forint’s Recent Strength Likely Driven by Lower Core Inflation
1453 GMT - The forint’s gains over the past month mostly reflect a deceleration in underlying inflation, Commerzbank says. Hungary’s central bank is expected to raise its benchmark rate by another 30 basis points at Tuesday’s policy meeting but this is priced in, Commerzbank’s Tatha Ghose says. “The [forint’s] strength is more likely being driven by favorable inflation developments in Hungary, where the tax-adjusted core inflation rate has fallen back closer to the 3% inflation target," Ghose says. That means Hungary’s real interest rate adjusted for core inflation has turned less negative over the past month, he says. EUR/HUF falls 0.2% to 349.9650, having earlier reached a near two-month low of 349.5063, according to FactSet.
Dollar Performs Better Than Yen, Swiss Franc
0716 GMT - The dollar is performing better than the two other main safe-haven currencies, the Japanese yen and the Swiss franc, amid concern about the increase in cases of the delta variant of the coronavirus and about growth prospects, says Commerzbank currency analyst Esther Reichelt. The dollar has additional support from optimism about prospects of the U.S. Federal Reserve tapering asset purchases, while the yen is hampered as rising Covid-19 infections look “more and more out of control." Meanwhile, given the Swiss franc’s significant rise since March, the Swiss National Bank may be trying to dampen further appreciation via intervention, Reichelt says. The DXY dollar index is last down 0.2% at 93.3520, USD/JPY rises 0.2% to 109.93 and USD/CHF is flat at 0.9165.
This story has been published from a wire agency feed without modifications to the text
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