Breaking News
Ad-Free Version. Upgrade your experience. Save up to 40% More details

Dollar Sluggish as Clocks Tick Down to Powell

ForexAug 25, 2020 02:38PM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
© Reuters.

By Yasin Ebrahim – The dollar eased on Tuesday, as a fall in consumer confidence stoked investor worries about the pace of the recovery and offset data showing a decline in the number of new U.S. infections.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, fell 0.22% to 93.88.

The dollar's struggles come in the wake of economic data suggesting the strength of the U.S. consumer, the backbone of the economy, could be on the wane.

The Conference Board’s consumer confidence gauge unexpectedly fell to 84.8 this month from 91.7 in July, missing economists’ forecast for a reading of 93.

While the drop is not expected to affect consumption in the third quarter, some warned of a threat to growth in the final quarter of the year.

"The drop in confidence and household cash flows will not prevent a huge increase in Q3 consumption, because the base effect created by the plunge in March and April and the subsequent rebound is enormously powerful, but it does threaten Q4," Pantheon Macroeconomics said.

The sluggish day for the greenback comes in the wake of declining coronavirus cases in the U.S. from a peak seen a just weeks ago, which many had attributed, in part, to the weakness in the world's reserve currency.

"Since the end of July, the number of cases in the U.S. are showing a significant downward trend. Recently, however, the rate of infection - average new infections per 100,000 inhabitants in the last 7 days - remained constant at around 13, " Commerzbank (DE:CBKG) said.

The greenback will come under added focus later this week on Thursday, when Federal Reserve Chairman Jerome Powell is slated to present the results of the central bank's review of its monetary policy strategy in a speech at the Fed's virtual conference. Normally, this conference is held annually in Jackson Hole, Wyoming.

The central bank launched the review nearly two years ago in an effort to meet its policy objectives more effectively, with the sluggish pace of inflation a key concern among policymakers.

Average inflation targeting, which would allow rates to run above the central bank’s 2% target, has been at the heart of the Fed’s policy framework review, with the central bank widely expected to adopt a form of average inflation targeting at the September meeting. The move would see the Fed loosen the reins on its 2% inflation target, which was established in the 1980s in an effort to pursue clearer policy objectives.

Overall, many expect the Fed chief to lean dovish and reiterate support for an ongoing expansion of monetary policy to ensure the economic recovery remains on track.

Dollar Sluggish as Clocks Tick Down to Powell

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at’s discretion.

Write your thoughts here
Are you sure you want to delete this chart?
Post also to:
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Comments (1)
Robert DZ the patterns
Robert DZ the patterns Aug 25, 2020 3:58PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
good, I bought calls today
Are you sure you want to delete this chart?
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
Sign up with Email