USD weakened slightly against most of its major rivals in the European session on Friday as investors waited for Federal Reserve chair Jerome Powell’s speech at the annual economic policy symposium in Jackson Hole later in the day.
The U.S. Dollar Index (DXY), measuring the U.S. currency's value relative to a basket of foreign currencies, decreased 0.08% from the previous close to 101.43.
Powell will address the Jackson Hole symposium at 14:00 GMT. Markets will scrutinize his speech for hints on the path of interest rates in the U.S.
The recent economic data from the U.S. reinforced bets that the U.S. central bank will lower its interest rates at each of the three remaining meetings scheduled for this year. The first decrease in interest rates - most likely a 25 basis point move - is fully priced in for the Fed’s September 17-18 meeting. Overall, a 100 basis point reduction is predicted by the end of 2024. This implies that money market participants assume that a more aggressive - 50-basis-point cut - may come either in November or December.
Meanwhile, two Fed officials - the Federal Reserve Bank of Philadelphia President Patrick Harker and the Federal Reserve Bank of Boston president Susan Collins yesterday spoke out in favour of a gradual and methodical approach to policy easing.