Markets May Take a Wait-and-See Approach to U.S. Dollar Movements in the First Half of the Jackson Hole Week

Markets May Take a Wait-and-See Approach to U.S. Dollar Movements in the First Half of the Jackson Hole Week

21.08.2023

Last weekend, the Canadian dollar fell against the yen despite the improvement in Canada’s July industrial production data—released on the 18th—which rose to +0.4% from the previous month’s -0.6%. The CAD/JPY pair fell by just over 60 pips, from 107.663 to 107.023.It broke below the 75-period moving average (MA) on the 4-hour chart. On the higher-time-frame daily chart, the CAD/JPY pair is positioned just below the 20-period MA and is trending toward the lower boundary of the uptrend line; therefore, we will be closely monitoring whether the Canadian dollar will continue to weaken against the yen.

European currencies fell as the euro weakened against the U.S. dollar after the final July consumer price index (CPI) for the eurozone, released last weekend, came in at 5.3% year-over-year—matching the previous month’s figure.The EUR/USD pair fell slightly from 1.0893 to 1.0844, hitting a new low for the month. On the daily chart, the 200-day simple moving average (SMA) support line lies approximately 100 pips below the current price, so we will wait and see if the price drops to the support level around 1.0786.

Today, at 15:00, Germany’s Producer Price Index; at 17:00, the Philippines’ Industrial Production; at 17:20, Taiwan’s Current Account;at 5:30 PM, Hong Kong’s Consumer Price Index; at 9:30 PM, Canada’s New Home Price Index and Poland’s benchmark interest rate; at 11:30 PM, Turkey’s central government debt; and at 12:30 AM, the U.S. 3-month/6-month Bill auction.This week, attention is expected to focus on remarks by Fed Chair Powell at the Jackson Hole Symposium, which begins on the 24th. We will carefully monitor the situation to see if the U.S. dollar’s movements during the first half of Jackson Hole week will be particularly notable.