US Markets

BUZZ-COMMENT-Big expectations for Fed's Powell and the USD

Credit: REUTERS/GARY CAMERON

U.S. Federal Reserve Chairman Jerome Powell will open today's virtual Jackson Hole symposium with a speech at 13.10 GMT, and markets want details on how the fed intends to ensure the U.S. economy remains on track in the current crisis - the details, or lack of which, can move USD.

Aug 27 (Reuters) - U.S. Federal Reserve Chairman Jerome Powell will open today's virtual Jackson Hole symposium with a speech at 13.10 GMT, and markets want details on how the fed intends to ensure the U.S. economy remains on track in the current crisis - the details, or lack of which, can move USD.

In it's daily note to clients, JP Morgan said it's unlikely that Powell will not address the Fed's policy review before the September Fed meeting. JP Morgan says average inflation targeting is a baseline expectation.

JP Morgan expects the USD to come under more pressure if Powell effectively sets the stage for a roll-out of this framework at the September meeting, more so if he gives specifics and assurance that it's moving forward.

Clearly there's scope for disappointment if Powell avoids the subject or dismisses it, which would no doubt see the USD regain some of its recent losses.

No surprise FX options are pricing increased short-term USD-related volatility .

For more click on FXBUZ

overnight expiry implied volatilityhttps://tmsnrt.rs/2YF3k90

(Richard Pace is a Reuters market analyst. The views expressed are his own)

((Richard.Pace@thomsonreuters.com))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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