The Jackson Hole symposium took place Friday 23rd, and Fed chair Jerome Powell's comments confirming further gradual tightening and there being no inflation has concerned investors, causing the dollar to drop further, with the dollar index down half a percent as the week ended.
“I see the current path of gradually raising interest rates as the [Federal Open Market Committee’s] approach to taking seriously both of these risks.” Powell said in speech at Jackson Hole, Wyo.
Idyllic Views in Jackson Hole, Wyoming
This caused a significant pop in precious metals, causing Gold to rise above the $1200/oz level to $1212, from where it had been resting on low $1180 levels in weeks prior, squeezing longs severely as we noted last week
Gold Futures Back Above 1200
Bitcoin is showing strong support, with highs reaching $6700 and dominance remaining around 53%, if the dollar takes a further fall back to it's 88 key handle, the strong dollars down pressure that has been playing on the market for months will finally abate.
Crucial Numbers Next Week
Taking in mind the recent Fed minutes, that showed concerns about trade, emerging markets and housing causing reason for doubt of a december hike.
With numbers down in new home sales and durable goods, we look ahead to PMI and Q2 GDP next week with anticipation for if there are signs of improvement.
Combined with the presidents' quiet open stance on easy access to credit and a cheap dollar, further increasing rates seems problematic. President Trump lashed out at the Fed again on Monday, saying he was not thrilled with constant interest rate hikes and telling the Fed it should “do what's good for the country”.
Further exasperating the dollar are ongoing political concerns in Washington as investors and traders alike, assess the impact of the President's growing legal concerns after his former lawyer Michael Cohen implicated him in crimes.