The dollar is modestly higher against the euro as North American trading opens, with EURUSD confined to a 15-pip range ahead of Fed Chair Kevin Warsh's Jackson Hole keynote. Treasury yields are rising across the curve, and a busy US and Canadian data slate could add momentum once the speech lands.
EUR/USD holds a narrow range
The greenback is higher against the euro, yen, pound, franc, Canadian dollar and New Zealand dollar, while it slips slightly against the Australian dollar. Yet the moves stay small: EURUSD has traded in just a 15-pip band, one of the tightest among the majors alongside USDCAD's 14 pips and AUDUSD's 14 pips. That tight range points to a market waiting for its next catalyst rather than one that has already made up its mind.
Warsh's Jackson Hole keynote is the catalyst
Warsh delivers his keynote at the Jackson Hole Economic Policy Symposium at 10:00 AM ET, his first such address since becoming Fed chair in May. The symposium's official theme is financial innovation in payments and policy, but traders will parse his remarks for signals on inflation, growth, the Treasury market and the path of monetary policy. Because the Fed has held rates steady at both meetings since Warsh took over, the market is primed to react to anything that shifts odds for the September meeting.
Treasury yields are already climbing into the speech, with the curve steepening as the biggest gains land at the long end: the 30-year yield is up 1.8 basis points to 5.209%, the 10-year is up 1.6 basis points to 4.688%, and the 2-year is up just 0.2 basis points to 4.234%.
Data and geopolitics add to the mix
Canada publishes second-quarter GDP at 8:30 AM ET, with annualized growth expected at 3.4%, a sharp rebound from the revised 0.1% contraction in the first quarter. At 10:00 AM ET, the final University of Michigan survey should also compete for attention: one-year inflation expectations are preliminary at 4.3%, up from 4.2% in July. Any shift there could move Treasury yields and the dollar depending on whether it reinforces or challenges Warsh's message.
For now, traders are left watching narrow overnight ranges and rising yields, with the scope for a bigger move once the Fed chair starts speaking.
Source: Investinglive
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