Dollar stabilizes as Fed Chair speech looms

The U.S. dollar remained steady around 99.15, as investors awaited Federal Reserve Chair Jerome Powell’s speech at the Jackson Hole symposium, with the market focusing on the possibility of keeping interest rates unchanged in September and potential political signals. Data showed that core personal consumption expenses, the Fed's preferred inflation measure, increased by 0.2% month-on-month and 3.3% year-on-year in July, indicating persistent inflationary pressures. Meanwhile, real GDP growth stood at 1.5% in the second quarter, reflecting a resilient economy. Concerns about inflation, along with higher long-term bond yields and increased financing issuance, increased market pressure on the dollar. However, worries about fiscal sustainability led some investors to shift toward gold and digital currencies. Asian currencies, such as the Korean won and Canadian dollar, experienced some recovery following interest rate decisions by their central banks, while the euro remained near its lowest in a week amid expectations of further monetary policy tightening.

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