The U.S. dollar remained stable near a one-week high against major peers on Friday, as investors adopted a cautious stance ahead of Federal Reserve Chair Kevin Warsh’s speech at the Jackson Hole symposium, seeking insights into his policy outlook. The euro and sterling exhibited a subdued performance, hovering near one-week lows against the dollar, last recorded at $1.1652 and $1.3597, respectively. Nevertheless, both currencies are poised to achieve a second consecutive monthly gain. The yen was little changed at 159.34 per dollar, having surrendered part of its intervention-driven gains; however, it was still on track for a 1.3% monthly rise. The dollar index, which measures the currency against six major peers, remained relatively stable at 99.13 during early Asian trading hours.
It has risen 0.3% this week but is still poised for a second consecutive monthly decline of 0.7% following comments from U.S. Treasury Secretary Scott Bessent regarding the Treasury’s plans to enhance buybacks of longer-dated bonds. That has fuelled concerns that efforts to suppress borrowing costs could undermine the value of the dollar. Market participants are now closely monitoring Warsh’s inaugural address in Jackson Hole, Wyoming, seeking insights into his monetary policy approach and strategies for controlling inflation. However, these anticipations have been moderated by his stance against offering clear forward guidance on interest rates. Several other Federal Reserve officials expressed their persistent concerns regarding inflation in the United States on Thursday and indicated their willingness to consider increasing interest rates.
“Uncertainty over the Fed’s reaction function and concerns that policymakers may be placing less emphasis on inflation control have increased market focus on Chair Warsh’s Jackson Hole remarks,” Sim Moh Siong said in a note. For the dollar to weaken significantly after the Treasury’s buyback announcement, markets would require indications that the Fed was willing to assist in containing Treasury yields, although this seemed improbable, he noted. Traders were assigning approximately 35% probabilities to a rate hike at the Federal Reserve’s September meeting, increasing to 75% by December. Treasury yields remain elevated, with those on benchmark U.S. 10-year notes last at 4.676%. In the realm of cryptocurrencies, bitcoin experienced an increase of 0.5%, reaching $80,620.33. This positions it for an approximate 30% gain in August, marking its most significant monthly increase since late 2024.
The Australian dollar increased by nearly 0.1%, reaching a three-month high of $0.72 as expectations for rate hikes intensified. The New Zealand dollar experienced an increase of 0.2%, reaching a value of $0.5960. The Canadian dollar remained unchanged at $1.3844 and is poised for a second consecutive month of decline following the escalation of trade tensions with the U.S. Brent crude futures remained close to $90 a barrel following a report indicating that President Donald Trump had dismissed the notion of renegotiating the terms of the memorandum of understanding that the U.S. entered into with Iran in June.
