InstaForex

August 27, 2021

Powell Hasn't Had Time to Speak Yet, Is the USD Up?

 The US dollar traded stronger following hawkish statements by Federal Reserve (Fed) policymakers on reducing bond purchases as investors awaited a speech from Chairman Jerome Powell tonight.


The dollar index which measures the strength of the greenback dollar against a basket of major currencies traded higher around 93.10, rebounding from yesterday’s low of 92.80.


Dallas Fed President Robert Kaplan expects that the central bank will start raising interest rates next year, a statement seen as more hawkish than his previous statement concerned about the risks posed by the delta variant.


While Kansas City Fed President Esther George and Fed St. Louis, James Bullard also did not take seriously the impact of the delta variant in a separate interview, in which Bullard reiterated his call for the Fed to start reducing its monthly bond purchases soon.



The main focus of the market is now on Jerome Powell who is scheduled to speak at 10pm tonight (Malaysian time) to get more clarity on it.


Meanwhile, investors were shown second -quarter US economic growth data readings which showed an increase of 6.6% compared to the previously reported 6.5% increase, but slightly offset from the expected 6.7% growth.


Meanwhile, the US jobless claims total data rose to 353,000 from expectations of 345,000 and higher than the previously recorded figure of 349,000.


Following the report, the Wall Street stock market weakened again, seeing the NASDAQ and S&P 500 close lower. This in turn pushed the US dollar to rise again.