Dollar Firms Ahead of Powell Speech at Jackson Hole

The dollar extended a two-day advance in Asian trading on Wednesday as investors positioned for the Federal Reserve’s annual symposium in Jackson Hole, where Chair Jerome Powell is due to speak on Friday. The dollar index inched up to 98.393, its strongest level in more than a week, buoyed by expectations that Powell may temper market bets on imminent policy easing. Futures markets now assign an 84% probability that the Fed will cut rates at its 17 September meeting and are pricing in roughly 54 basis points of reductions by year-end. A hotter-than-expected U.S. producer-price report last week has complicated the case for loosening, and analysts say Powell could signal caution over cutting too soon, especially with tariff-related price pressures still in the outlook. Against major peers, the greenback bought ¥147.78, while the euro slipped to $1.1633 and sterling to $1.3476, their lowest levels since 12 August. Regional currencies also softened: the Australian dollar fell to $0.6449 and the New Zealand dollar hovered at $0.5895, a two-week low, ahead of the Reserve Bank of New Zealand’s policy decision later today, where most economists expect a quarter-point cut.