 Dollar appears to have finally taken a side, the downside, with Fed chair Jerome Powell's Jackson Hole speech. In short, Fed is now adopting a "flexible form of average inflation targeting", to achieve inflation that "averages 2 percent over time". Therefore, following periods when inflation has been running below 2 percent, appropriate monetary policy will likely aim to achieve inflation moderately above 2 percent for some time. Markets see that Fed would keep monetary policy loose for longer, to allow inflation to overshoot 2%. Technically, GBP/USD and AUD/USD have both taken out recent resistance at 1.3267 and 0.7275 respectively, indicating rally resumption. USD/CAD has also dropped through 1.3133 temporary low finally to resume recent fall. Focus is now on whether the relatively weak Euro would take out 1.1965 resistance to align itself with others. At the same time, Gold's strong rally and firm break of 4 hour 55 EMA suggests completion of the fall from 2015.66. It's possible that consolidation from 2075.18 has completed. But in any case, further rise is now in favor to 2015.66 resistance first. Break will solidify the bullish case. In other markets, DOW opens higher up more than 100 pts. In Europe, currently, FTSE is up 0.06%. DAX is down -0.12%. CAC is down -0.09%. German 10-year yield is down -0.041 at -0.455. Earlier in Asia, Nikkei dropped -0.35%. Hong Kong HSI dropped -0.83%. China Shanghai SSE rose 0.61%. Singapore Strait Times dropped -0.88%. Japan 10-year JGB yield dropped -0.0006 to 0.044. |
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