FX Market Overview for August 17–21: USD Weakens as Focus Shifts to Jackson Hole
💵 The US dollar ended the week under broad pressure, with the DXY falling from around 99.6 to near 98.8. EUR, GBP, AUD and NZD all strengthened against the dollar, while commodity-linked currencies were also supported by elevated energy prices.
🏦 One of the week’s key drivers was the US Treasury’s decision to expand long-term bond buybacks, which initially pushed yields lower and added pressure on the dollar. Long-term yields later rebounded, however, suggesting that concerns surrounding the Treasury market and US fiscal conditions remain unresolved.
📊 The FOMC minutes delivered a relatively hawkish signal, with the Fed keeping rates at 3.50–3.75% while three members favored an immediate 25bp hike. Despite this, the dollar failed to stage a meaningful recovery, indicating that softer US data and moves in Treasury yields carried greater weight for FX markets.
🇦🇺 AUD still posted strong weekly gains despite Australian employment falling by 15,800 and unemployment rising to 4.5%. CAD also received support from elevated oil prices, while Canada’s headline CPI rose to 3.0% even as core inflation measures remained relatively contained. EUR and GBP mainly benefited from broad-based USD weakness.
👀 Looking ahead, attention shifts to Jackson Hole and key US data including PCE and GDP. Softer inflation and a less hawkish Fed message could keep the dollar under pressure, while stronger-than-expected data or another sharp rise in US yields could trigger a short-term USD rebound.
#Forex $USDC $USDE $USDS
💵 The US dollar ended the week under broad pressure, with the DXY falling from around 99.6 to near 98.8. EUR, GBP, AUD and NZD all strengthened against the dollar, while commodity-linked currencies were also supported by elevated energy prices.
🏦 One of the week’s key drivers was the US Treasury’s decision to expand long-term bond buybacks, which initially pushed yields lower and added pressure on the dollar. Long-term yields later rebounded, however, suggesting that concerns surrounding the Treasury market and US fiscal conditions remain unresolved.
📊 The FOMC minutes delivered a relatively hawkish signal, with the Fed keeping rates at 3.50–3.75% while three members favored an immediate 25bp hike. Despite this, the dollar failed to stage a meaningful recovery, indicating that softer US data and moves in Treasury yields carried greater weight for FX markets.
🇦🇺 AUD still posted strong weekly gains despite Australian employment falling by 15,800 and unemployment rising to 4.5%. CAD also received support from elevated oil prices, while Canada’s headline CPI rose to 3.0% even as core inflation measures remained relatively contained. EUR and GBP mainly benefited from broad-based USD weakness.
👀 Looking ahead, attention shifts to Jackson Hole and key US data including PCE and GDP. Softer inflation and a less hawkish Fed message could keep the dollar under pressure, while stronger-than-expected data or another sharp rise in US yields could trigger a short-term USD rebound.
#Forex $USDC $USDE $USDS