BlockBeats News, August 28th

The US dollar held near a one-week high against major currencies on Friday as investors remained cautious ahead of Federal Reserve Chair Powell's speech at the Jackson Hole Global Central Bank Symposium.

With US inflation persistently above the 2% target level, traders have already priced in expectations of at least one Fed rate hike this year, by 25 basis points, supporting the dollar's recent performance. The market is hoping to gain more insight into monetary policy and the US Treasury's efforts to lower long-term borrowing costs from Powell's speech, as recent bond market volatility has been significant.

However, analysts believe that given Powell's reluctance to provide clear forward guidance, he is more likely to outline the latest developments of the five Federal Reserve operational workstreams set up at the beginning of his tenure. Volkmar Baur, FX and commodities analyst at Deutsche Bank, stated in a report that Powell has repeatedly emphasized in recent weeks that the Fed's 2% inflation target is non-negotiable, but he has never explicitly mentioned the PCE price index in this context. He believes the Fed may be considering adopting a different inflation measure. He noted that if Powell signals a similar approach, it could dampen market expectations of further rate hikes and be interpreted as a dovish signal, potentially putting pressure on the dollar.