1. Forex Preview: EUR Supported by Solid Data
The EUR remains supported by good economic data out of France and Germany, which also reduced the immediate pressure on the ECB to act with extreme dovish measures in its next meeting. Elsewhere the USD remained the strongest currency around and we could see further upside this afternoon if Powell finds clear words about the Fed’s intention of changing the interest rate on its next meeting.*
2. Investors Eye Powell’s Speech
European markets opened higher on Friday morning as risk appetite returned with investors now largely focusing on the speech from U.S. Federal Reserve Chairman Jerome Powell at a yearly central banking symposium in Jackson Hole. Markets are still expecting a turn to the dovish side by the Federal Reserve Chairman later today, but Powell has repeatedly stated that he will avoid causing havoc in the markets at all costs, so we would expect that he will at least tread carefully. That said, Fed’s Harker stated in an interview on CNBC yesterday that he does not see the need for another rate cut and that the present rate should stay as it is for a while as he believes it to be around neutral.**
3. Stock Markets Recover
Stock markets gave in yesterday but recovered well over the Asian session as optimism in Asia about China’s stimulus plans seems to be quite supportive. U.S. stock index futures also point to a bullish U.S. open later in the day.**
4. Oil Prices Drop, Gold Lower
Meanwhile, oil prices clawed back from the previous day’s losses on Friday, but later dropped as tighter supplies from key producers were not enough to offset concerns on slowing demand. Meanwhile, gold prices also edged lower with XAU/USD last seen trading below the key $1500 level.***
5. Bitcoin Reclaims $10K
Bitcoin repeatedly defended itself from further drops and reclaimed the 10k level again and again, which for the moment keeps the cryptocurrency in neutral territory and the bearish pressure has eased off for now.****
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Sources:
*Financial Times Aug 23, 2019 03:07 AM ET
**Reuters Aug 23, 2019 3:53 AM ET
***CNBC Aug 23, 2019 2:48 AM ET
****Investing Aug 23, 2019 05:20 AM ET
