Fed Chair Yellen’s Jackson Hole speech in focus – MUFG

Lee Hardman, Currency Analyst at MUFG, suggests that the main focus this week for the FX market will be the upcoming speech from Fed Chair Yellen at Jackson Hole which could offer more guidance over the likely timing of the next rate hike.

Key Quotes

“However, it is more likely that the current cautious Fed will refrain from explicitly signalling at which meeting it plans to next raise rates. There is still around a month until there next meeting on the 21st September and the Fed will likely feel it is too early to commit to a rate hike at this stage.

Rather the Fed is more likely to emphasise that the outlook for Fed policy remains data dependent. It will leave open the possibility of a hike in September if the economic data proves supportive, but we believe that it remains more likely to be delivered in December assuming that Donald Trump does not become President. In these circumstances, the US dollar will find it difficult to embark on a strengthening trend in the near-term.”