Asian traders started selling the dollar at the opening of the auction, yielding to a bearish attitude and disappointment with the results of the symposium in Jackson Hole. However, for a long time they were not enough and by the middle of the Asian session a calm correction had begun. Meanwhile, oil and oil products are still becoming more expensive: investors fear long-term consequences of Hurricane Harvey for the US oil industry.
The dollar is trying to recoup, but somehow unconvincing
Meanwhile, the persistence of the persecution of the dollar continues in the foreign exchange market. The USD index, which measures the dynamics of the currency against a basket of similar ones, declined by 0.3% in the morning to 92.486. This is the lowest value since May 3, 2016. The euro / dollar in the morning updated the highest January 2015, marking at the level of 1.1958, now the pair is consolidating in the area of 1.1925. Pound / dollar for a short time tested the area above 1.2900, but by the middle of the trading session in Asia adjusted to 1.2880. The dollar / yen is consolidating near the key support of 109.00. In general, the dynamics of the dollar remains a downward trend, however, in the short term there is already a certain fatigue of the bears.
The last week of August is traditionally one of the quietest in the foreign exchange market, therefore, given the half-empty economic calendar, in the coming days one can count on consolidation in the ranges with signs of correction rather than on new breakthroughs. In addition, another risk factor and a traditional source of volatility – a report on the labor market in the USA – looms on the horizon. This means that traders are likely to prefer to calmly reflect on the situation – including the words of Yellen, who in fact did not say anything bad for the dollar. In addition, on Wednesday, Trump will speak on the issue of tax reform. If the president succeeds in lighting markets with the idea of benefits and diverting attention from negative factors, including his ill-fated reaction to the riots in Charlottesville, the dollar may grow a little.