Financial markets endured brief episodes of volatility this past week as the US Dollar[1] gyrated against major FX peers during the Jackson Hole Symposium. A commanding risk-on tone prevailed nonetheless with US stock indices like the S&P 500[2] and Nasdaq[3] advancing to new all-time highs. This was likely driven in large part by the Fed communicating a shift to average inflation targeting[4] and an openness to ‘running things hot.’
The pullback in gold prices[5] fizzled out last week as inflation expectations climbed, which helped the precious metal form technical support[6] around $1,910/oz. On balance, spot EUR/USD[7] price action gained 0.9% over the last five trading sessions while GBP/USD[8] and AUD/USD[9] jumped 2.0% and 2.9% respectively. The Dollar-Yen[10] spiked notably lower Friday on news that Japan’s Prime Minister Shinzo Abe officially resigned[11].
In the week ahead, the DailyFX Economic Calendar[12] details the upcoming release of China and US PMIs, Euro[13] area inflation, and nonfarm payrolls[14]. The Australian Dollar[15] and ASX 200[16] stand to steal focus of traders owing to an RBA decision and Australia GDP report due next week as well. Further, a notable shakeup is scheduled for the Dow Jones Industrial Average[17], which was largely motivated by the Apple stock split[18] set to take place on August 31. What other themes and markets are traders watching next week?
Fundamental Forecasts:
Australian Dollar May Rise on RBA, Economic Outlook, Strong Risk Appetite[19]
The Australian Dollar may rise following the
