The dollar fell across the board in immediate reaction to Fed Chairman Powell’s comments, but regained traction and returned above the levels it traded before the speech. In its highly focused speech in Jackson Hole symposium, Powel unveiled central bank’s aggressive new strategy which will tolerate a higher level of inflation, keep interest rates at ultra-low levels and turn focus on jobs In other words, the high inflation, once the biggest threat to the economy, will no longer present a serious danger, even if unemployment is low and the economy is growing that will allow the central bank to keep interest rates much lower than it otherwise would. Dollar’s quick recovery after post-speech drop and subsequent advance could be initial signal of greenback’s stronger recovery from new 2 1/2 years low, posted last week, which would at least provide better levels to re-enter strong bearish dollar’s trend, as Fed’s intension to keep ultra-low rates, accompanied with the bleak revision of US Q2 GDP and jobless claims keeping high levels, can only increase pressure on the US currency.
Res: 93.45; 93.87; 94.00; 94.26
Sup: 93.06; 92.90; 92.76; 92.55
