Euro Rises & US Dollar falls. Trader’s Eyeing Jackson Hole Symposium

2 min read
26 Aug, 21
Written by Clover4X
Article Highlights:
  • US dollar declines against the euro as traders eye the Fed’s annual conference
  • The Jackson Hole symposium could create high volatility across the currency board

Euro Climbs from Ten-Month Lows

The euro is trading higher for a fifth straight day against the US dollar as the Fed’s Jackson Hole symposium kicks off today. The EUR/USD pair moved to a session close of 1.1771 on Wednesday, bringing its gains over the past four days to a total of nearly 100 pips, or 0.8%.

The euro slipped to a ten-month low on Friday when it reached an intraday bottom of 1.1663 against the greenback. Since then, currency traders have favored the euro in anticipation of the latest updates from the Federal Reserve and Chairman Jerome Powell.

Weighing on the US dollar are the expectations of an interest rate hike and scaling back asset purchases as indicated in the latest meeting minutes from the Fed released roughly a week ago.

The Jackson Hole symposium, a three-day summit hosted by the Federal Reserve, is expected to present more details over the potential start of tapering, or unwinding, the $120bn in monthly bond purchases.

Federal Reserve Chairman Jerome Powell Remarks Ahead

Against that backdrop, the EUR/USD staged a modest rebound in the last few days. The slight upside swing came after several months of decline. In late May, the EUR/USD pair was trading around 1.22 before it started moving lower in a two-month-long slide that brought the pair’s value to its recent lows last seen in November 2020.

As the Fed’s annual conference is about to begin, the US dollar has been losing value against other major counterparts on the currency board. The GBP/USD has been trading higher for the last three days and is currently hovering near its weekly highs of around 1.3740.

The Australian dollar and the New Zealand dollar have been advancing against the weaker US dollar. The AUD/USD has gained over 150 pips, or more than 2%, in the past three days, while the NZD/USD has added about 140 pips, or 2%, for the same period.

The Jackson Hole symposium, moved entirely online this year, could bring heightened volatility across currencies today and tomorrow.

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