Dollar Holds Ground As Focus Turns To Jackson Hole
The dollar was little changed in subdued dealing on Monday, as global stocks stabilized and traders looked forward to the Federal Reserve’s annual Jackson Hole retreat.
Markets are on pins and needles, waiting for Fed Chair Ben Bernanke’s Friday speech. Bernanke is not expected to announce another round of quantitative easing measures, but his remarks on the recent economic downturn will be scrutinized for clues about how the Fed will craft monetary policy in the coming months.
There was no economic news from the U.S. on Monday, other than a report from the Chicago Fed showing economic conditions improved slightly in July.
The Chicago Fed’s National Activity Index narrowed to negative 0.06 in July, following a revised negative 0.38 in June.
Focus remained on Europe, Focus remained on the European sovereign debt crisis, with German Chancellor Merkel insisting that the creation of euro zone bonds would be “exactly the wrong answer” to the debt crisis facing Europe.
Meanwhile Finance Minister Wolfgang Schaeuble shrugged off last quarter’s dismal growth figures, saying that Germany is in no danger of slipping into recession.
The dollar wobbled near $1.44 versus the euro, having stayed near that mark for the past few weeks.
The buck steadied at $1.6490 versus the sterling, after touching a 3-month low near $1.66 on Friday.
Meanwhile, the dollar briefly fought back above Y77 versus the yen as Japanese authorities signaled they will further intervene if the yen stays at historic highs.
Last week, the dollar dropped to a record low of Y75.93.
The buck was also steady against the Swiss franc, hovering above CHF 0.75. The dollar hit a record low near CHF 0.7050 earlier this month.
Mid-morning gains helped the dollar climb within a penny of parity versus its Canadian counterpart.
Looking ahead on the U.S. economic calendar, the Commerce Department’s new home sales and durable goods orders reports and the weekly jobless claims report are due out later this week.
The Federal House Finance Agency’s house price index for June, the preliminary second quarter GDP report, the Reuters/University of Michigan’s revised consumer sentiment report for August and Treasury auctions of 2-year, 5-year and 7-year notes round up the other economic data of the week.
