Forex

Warsh's comments accelerated the EUR/USD selloff, raising the stakes as buyers look to stabilize the broader recovery.

For much of this week, the EUR/USD has been edging lower with the US dollar regaining some ground after last week’s sell-off that was triggered, in part, by the bond market worries. Investors have been unwilling to bet further against the US dollar so far this week ahead of Kevin Warsh’s keynote speech at the Jackson Hole summit, due later today.

A bullish breakout has pushed AUD/CAD to its highest level since early 2021. Whether it can clear 0.9994 may determine if the move extends well above parity.

It has not been an easy week for the Japanese yen. Over the last four trading sessions, USD/JPY has posted a move of only around 0.3%, reflecting a market that continues to lack clear direction and remains trapped in a phase of neutrality.

Aussie has advanced in eight of the past nine weeks, but the next technical hurdle could determine whether bulls can sustain the broader advance.

Gold has stalled near major resistance after a powerful rally, while AUD/USD looks stretched and USD/CAD attempts to extend its rebound.

Australia’s latest inflation report was ugly enough to make mortgage holders feel sick, and traders have responded by rapidly ramping up RBA hike bets. The Aussie is now breaking key levels across the major crosses.

Today's session has not been particularly favorable for the euro. Recent EUR/USD price action shows a decline of approximately 0.2% in favor of the U.S. dollar, a move largely driven by the release of the U.S. PCE inflation report and the recent recovery seen in the bond market.

But the question, of course, is how much further oil prices and bond yields can fall. For now, the combination is supportive of risk assets and is helping to sustain a relatively benign decline in the dollar. The focus today will be on US core PCE inflation, due for release shortly, while Nvidia’s second-quarter earnings will provide another test for risk appetite after the US markets close – not just for US indices but for global tech-heavy indices given the influence Nvidia has over the global tech and AI names.

AUD/USD is closing in on 72c as Australian and US inflation reports collide with Jackson Hole, setting the stage for a potentially volatile end to the week.

The last Core PCE before the Fed's September meeting will mark 65 straight months above the central bank's 2% target - will it be enough to push the FOMC toward a rate hike?

USD/JPY remains perched above major trend support as intervention risk and Jackson Hole raise the stakes for the next directional move.