The dollar is rising, hours before the Jackson Hole meeting

Investors continued to look to the Jackson Hole gathering of central bankers at the end of the week. Focus was on keeping risk exposure limited ahead of appearances from Federal Reserve Chair Janet Yellen, European Central Bank President Mario Draghi and a host of other key officials. The dollar was higher versus all of its G-10 peers, recording its first gain in five sessions against the yen, and the Bloomberg Dollar Spot index gained more than 0.3 percent on the day.

USD/CAD was trading slightly higher. It earlier touched a fresh three-week low at 1.2526 after Canadian June retail sales, ex-autos, rose more than forecast and reached a record for the first half of the year. Despite the early CAD gains, flows were exceptionally light and you could “hear a pin drop” on the trading floor, a trader in Toronto said. Market-implied odds for a BOC rate hike are around 70% for October

USD/JPY returned to near the daily high at 109.55, which was reached amid price action that was consistent with a few stop- loss buy orders being tripped on the break above 109.50, despite traders only reporting sell orders in that vicinity. Overnight, persistent USD buying by Japanese banks lifted the dollar back over 109.00, according to a trader familiar with the transactions who asked not to be identified because not authorized to speak publicly. Some of that demand was said by a London trader to be on behalf of Japanese importers

EUR/USD was trading near 1.1750, not far from the 1.1745 low of the day set ahead of the U.S. session, with the EUR gaining some support from cross flows. While reports say Draghi will not announce new policy initiatives when he speaks at Jackson Hole, it’ll be harder for him to sidestep questions on the health of the economy and the inflation outlook

Source: Bloomberg Pro Terminal

Jr Trader Petar Milanov

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