The dollar steadied on Friday as investors awaited a highly anticipated speech by Federal Reserve Chair Jerome Powell, with analysts now doubting the central bank's boss will hint when he may start to trim asset purchases.
The market was focused this week on what signals the U.S. central bank could send at its annual Jackson Hole conference, which kicked off on Thursday in virtual format, with the main event being Powell's speech on Friday.Regional Fed chiefs - Dallas' Robert Kaplan, Kansas City's Esther George and St. Louis' James Bullard - downplayed on Thursday the impact of the Delta coronavirus variant in separate interviews.
Analysts doubt Powell will signal when the Fed may start to cut its asset purchases just yet. The rough consensus in the market is that the Fed's Chair will announce tapering in the fourth quarter, giving a clear signal at one meeting before the actual announcement. But any move away from "a more cautious approach" could give a boost to the dollar, said Thu Lan Nguyen, FX analyst at Commerzbank."I see the risks today in a stronger dollar, should Powell possibly make a more hawkish statement on tapering than generally expected after all," she said.
The dollar index , which measures the greenback against a basket of six major currencies, was little changed, exchanging hands at 93.046 by 0820 GMT. Benchmark 10-year Treasury note yields were last at 1.3458%, after reaching 1.375% following Bullard's comments, the highest since Aug. 12."There are worries events in Afghanistan could erode public approval of the Biden administration," said Toshiya Nakamura, chief manager of forex at Mitsubishi UFJ Trust Bank.
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