Last week, the US Dollar was mostly bearish following the release of the minutes of the Federal Reserve meeting last month.
The minutes dampened the market hopes of another interest rate hike later this year after the minutes showed that officials are still concerned regarding the current inflation rate and its recent performance. The Euro rallied against the greenback as investors maintained a bullish outlook on the currency. The Euro was up by 11% against the Us dollar as of last week.
The US Dollar was also pressured in the midst of the geopolitical concerns between the United States and North Korea. However, it almost recorded its second highest week this year despite a five-day low brought by the Fed meeting minutes. However, it remained mostly down against other major currencies.
However, on Monday, the US dollar recovered during the European trading day’s early hours as the markets awaited the upcoming Federal Reserve economic conference in Jackson Hole, Wyoming.
Federal Reserve Chair Janet Yellen and European Central Bank head Mario Draghi are expected to speak at the said event. In the past couple of years, central bank official heads have announced major policy changes and updates during the event.
Although Yellen was initially expected to shed light on the market hopes of another interest rate hike, the recent Fed meeting dampened these hopes while European Central Bank President Draghi is also expected to not announce new policies during the conference. However, he is expected to provide the public an update regarding its monetary stimulus.
It rallied 0.2% higher against the Euro on Monday and remained mostly flat against the British pound. The dollar index which measures the US dollar’s strength against six other major currencies remains unchanged at 93.448 or 0.09% higher on Monday.
Benchmark ten-year U.S Treasury yields lost 2.16% on Friday which was its lowest close since last June when it closed 2.19% from having previously stood at 2.199%.
The greenback which recently recorded a four-month low against the Japanese yen edge slightly higher as the investors also shifted their focus from the ongoing political issues in Washington the upcoming annual Federal reserve banking conference in Jackson Hole Wyoming.
Aside from the looming Jackson Hole event, the markets are still concerned over the Trump administration’s lack of so-called commitment to implementing the political policies including a business tax reform which was promised during Trump’s campaign. There is also an ongoing concern regarding Trump’s economic plan for the country.