US Dollar Dips Ahead of Jackson Hole As Rates Inch Higher

← back to the list


US Dollar Dips Ahead of Jackson Hole As Rates Inch Higher

Posted on August 23rd, 2018 in Government Regulation by Tom Whitbread

The US Dollar Index (DXY) dropped back to rest on 95 yesterday. giving some relief to precious metals and BTC

The Jackson Hole symposium is at the end of this week, making analysts eager to see exactly how the Federal reserve is intending to scale down the central bank's $4 trillion dollar bond portfolio.

The fed overnight rate, (the rate that effects interbank lending) inched back up higher last week and remained there this week at 1.92% just within a whisker from topping the Fed's targeted range of 1.75% to 2%

This is significant as if the rate ticks up again, outside of the 2% upper target - both traders and investors are likely to interpret it as a sign, that the central bank may have lost control of the rate. 

With the DXY dipping towards 95 again where it had been buoyantly placed above 96 earlier in the week, if lower lows continue it. It could indicate that a cheap dollar may be on the cards for the end of 2018.

Certainly with Trump's criticism of the Feds rate being so verbose, putting demands on them to reduce interest rates. A cheap dollar providing businesses with easy access to credit, is clearly a crucial pillar in Trumps plan to make america great again. 

Sources:

https://www.reuters.com/article/us-usa-trump-fed-exclusive/exclusive-trump-says-not-thrilled-with-feds-powell-for-raising-rates-idUSKCN1L5207

https://www.wsj.com/articles/jackson-hole-gets-added-attention-as-key-fed-rate-ticks-higher-1534939200