Forex Today: Focus on Jackson Hole and the coronavirus Delta variant

Valeria Bednarik FXStreet

What you need to know on Wednesday, August 25:

The greenback edged lower for a second consecutive day, as the market mood remained positive. Stocks gains were modest, as investors become cautious ahead of the Jackson Hole Symposium and whatever US Federal Reserve chief Powell has to say about the future of monetary policy. The timing for tapering is in the eye of the storm and Powell may disappoint investors.

Commodity-linked currencies were the best performers, advancing the most against the greenback, helped by stable gold prices and firmer crude oil prices. AUD/USD trades around 0.7250, while USD/CAD stands at 1.2590. On the other hand, spot gold closed at $1,805 a troy ounce, while WTI settled at $ 67.60 a barrel.

The EUR/USD pair struggles around 1.1750, while GBP/USD and USD/JPY ended the day unchanged.

US Treasury yields were up, with that on the 10-year note nearing 1.30% at the end of the day.

The coronavirus Delta variant weighs on the market’s sentiment. The number of cases in Israel skyrocketed, while the UK reported over 30K new coronavirus contagions and 174 new deaths, with the number of deaths registered in England and Wales in the week ending 13 August at the highest level since late March. The situation is also worsening in the US.

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Author

Valeria Bednarik

FXStreet

Valeria Bednarik was born and lives in Buenos Aires, Argentina. Her passion for math and numbers pushed her into studying economics in her younger years.

EUR/USD keeps the rangebound trade near 1.1850

EUR/USD is still under pressure, drifting back towards the 1.1850 area as Monday’s session draws to a close. The modest decline in spot comes as the US Dollar picks up a bit of support, while thin liquidity and muted volatility, thanks to the US market holiday, are exaggerating price swings and keeping trading conditions choppy.

GBP/USD flirts with daily lows near 1.3630

GBP/USD has quickly given back Friday’s solid gains, turning lower at the start of the week and drifting back towards the 1.3630 area. The focus now shifts squarely to Tuesday’s UK labour market report, which is likely to keep the quid firmly in the spotlight and could set the tone for Cable’s next move.

Gold battle around $5,000 continues

Gold is giving back part of Friday’s sharp rebound, deflating below the key $5,000 mark per troy ounce as the new week gets underway. Modest gains in the US Dollar are keeping the metal in check, while thin trading conditions, due to the Presidents Day holiday in the US, are adding to the choppy and hesitant tone across markets.

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It is likely to be a quiet start to the week, with US markets closed on Monday for Presidents Day. European markets are higher across the board and gold is clinging to the $5,000 level after the tamer than expected CPI report in the US reduced haven flows to precious metals.

XRP steadies in narrow range as fund inflows, futures interest rise

Ripple is trading in a narrow range between $1.45 (immediate support) and $1.50 (resistance) at the time of writing on Monday. The remittance token extended its recovery last week, peaking at $1.67 on Sunday from the weekly open at $1.43.