Let us check the market. Traders are forecasting a dovish tone from the Federal Reserve’s Powell. Durable goods from the United States slowed in July.
The yuan rose toward a seven-month high because of the trade deal relief.
Investors refrained from making risky bets. This was a day ahead of a key speech from Jerome Powell, Federal Reserve Chairman. So, the United States dollar and the euro traded cautiously on Wednesday.
Powell could unveil a softer policy stance towards inflation at the annual Jackson Hole retreat on Thursday, during growing speculation. Thus, to prop up the United States economy, investors now brace for possible new steps.
Stephen Innes is the chief global market strategist. He works at AxiCorp. In a morning note, he wrote that either the United States dollar rips higher for a few weeks or Powell will drop something juicy for ‘reflationistans’ (also called the United States dollar bears).
Moreover, he added that he would never bet against the Federal Reserve sounding dovish during an easing cycle.
The dollar index is tracking the greenback value against a basket of currencies. The index rose 0.16% to 93.11. That was after taking a hit on Tuesday following some data showed the United States consumer confidence tumbling to its lowest point in more than six years.
Most probably, on Wednesday, data will show that the growth in US durable goods orders slowed in July. So, it will make the concerns from the policymakers regarding the economy more transparent.
Ipek Ozkardeskaya is a senior analyst. She works at Swissquote bank. She told her clients that a softer-than-expected figure should revive the Federal Reserve doves. Meanwhile, a better-than-forecasted read would improve the mood of investors. However, it will not have a material impact on the dovish expectations of the Federal Reserve.
The United States dollar was against the euro at $1.1818.
That is leading news of the market.