Dollar dives after Jackson Hole

“The time to buy is when there’s blood in the streets.” - Baron Rothschild

 

 

HEADLINES

 

 

• Dollar slips after Powell embraces tapering, holds on rate hikes
• EUR/USD soars to test 1.1800 as USD tumbles after Powell’s speech
• Gold ends at nearly 4-week high as Powell remarks fail to offer any surprises
• Oil firms slash U.S. Gulf of Mexico output by 91% ahead of powerful Hurricane Ida
• Major averages finish the week higher after Powell prepares markets for Fed’s bond taper this year
• Bitcoin and Stocks Rise on Dovish Fed
• NFP: Hiring could be a bit brisker than consensus expectations – CIBC

 

 

FOREX

 

 

Dollar slips after Powell embraces tapering, holds on rate hikes

 

The dollar slid on Friday after Federal Reserve Chair Jerome Powell indicated in a highly anticipated speech that the U.S. central bank could start tapering its massive support to the economy could start by year's end, which was not as fast as many in the market had assumed.

Powell said there had been clear progress toward maximum employment and he believed that if the U.S. economy improved as anticipated, "it could be appropriate to start reducing the pace of asset purchases this year." But Powell told the Fed's annual Jackson Hole symposium the timing and pace of tapering should not be construed as a signal for when interest rates will begin to rise.

 

EUR/USD soars to test 1.1800 as USD tumbles after Powell’s speech

 

The EUR/USD reversed sharply from 1.1734, jumping to 1.1798, after the release of Fed Chair Powell's speech at the Jackson Hole Symposium. His words triggered a decline of the US dollar across the board.

 

 

COMMODITIES

 

 

Gold ends at nearly 4-week high as Powell remarks fail to offer any surprises

 

Gold futures settled back above the key $1,800-an-ounce mark on Friday, their highest in nearly four weeks. Remarks from Federal Reserve Chairman Jerome Powell, at the Jackson Hole central-bankers symposium, revealed that he supports tapering the pace of bond purchases this year, but continued to see high inflation as “transitory.” Powell “did not give any concrete details on a taper timeline, which helped to push gold back above $1,800 as the dollar remains weak.”

 

Oil firms slash U.S. Gulf of Mexico output by 91% ahead of powerful Hurricane Ida

 

Oil firms on Saturday cut nearly 91% of U.S. Gulf of Mexico crude oil production, roughly 1.65 million barrels, as Hurricane Ida makes its way toward major U.S. offshore oilfields, according to the Bureau of Safety and Environmental Enforcement. The regulator also estimated that roughly 84.87% of natural gas production in the Gulf of Mexico has been shut in.

 

 

STOCKS

 

 

Major averages finish the week higher after Powell prepares markets for Fed’s bond taper this year

 

Stocks rose on Friday heading for a winning week as Federal Reserve Chairman Jerome Powell prepared the markets for the central bank to pull back on some of its monetary stimulus, saying it’s likely to start tapering its $120 billion in monthly bond purchases this year.

 

 

CRYPTO

 

 

Bitcoin and Stocks Rise on Dovish Fed

 

Bitcoin rose along with stocks on Friday after a weeklong consolidation below the $50,000 resistance level. On Friday, Federal Reserve Chairman Jerome Powell reiterated that the central bank could taper asset purchases later this year as inflation gains appear to be temporary. Powell’s comments contributed to a weaker dollar and higher bitcoin price as concerns about a more immediate taper, or a winding down of the Fed’s monthly bond purchases, were put at ease.

 

 

ANALYSIS

 

 

NFP: Hiring could be a bit brisker than consensus expectations – CIBC

 

“Hiring looks to have continued at a brisk pace in August, as signalled by a further drop in jobless claims. Higher wages and recruitment efforts likely fuelled a net gain of 900K jobs. Job gains will again have been concentrated in services that have reopened, while state and local governments could have increased headcounts further, making use of recently received federal funds.”

 

 

CHART

 

 

Spot Silver – Daily Candlesticks

Source: GKFX Prime Metatrader 4

XAG/USD put in a large bullish engulfing candlestick, taking the price above 23.90 resistance and through 24.0 to a 3-week high and potential breakout. - Prepared by Trading Writers*

 

 

CALENDAR

 

 

*Times in GMT

Source: FX Street Economic Calendar

 

 

SOURCE

 

https://www.fxstreet.com/economic-calendar
https://www.investing.com/news/economy/dollar-holds-firm-as-fed-hawks-urge-early-taper-ahead-of-powells-speech-2601177
https://www.fxstreet.com/news/eur-usd-soars-to-test-11800-as-usd-tumbles-after-powells-speech-202108271415
https://www.marketwatch.com/story/gold-edges-higher-as-market-awaits-powells-jackson-hole-speech-11630067457
https://www.cnbc.com/2021/08/26/stock-market-futures-open-to-close-news.html
https://www.coindesk.com/markets/2021/08/27/market-wrap-bitcoin-and-stocks-rise-on-dovish-fed/
https://www.fxstreet.com/news/nfp-hiring-could-be-a-bit-brisker-than-consensus-expectations-cibc-202108271647