The US dollar rose on Thursday as investors braced themselves for the Federal Reserve’s Jackson Hole symposium, with Fed Chair Jerome Powell slated to speak on Friday. Softer-than-expected economic data during the week has further muddied investors’ interest rate outlooks.
Viewed largely as a safe haven during uncertain times, the dollar emerged stronger on Thursday against a basket of major currencies with the dollar index rising 0.15% to 103.50. The pound fell 0.3% to $1.2703 as a slowdown in British factory activity raised the possibility of a UK recession. European manufacturing also stumbled, sending the euro 0.07% lower to $1.0857.
“As the Jackson Hole Symposium gets underway, market participants are looking for direction,” Isabel Albarran, Investment Officer at Close Brothers Asset Management observed. Albarran observed that the cooling labor market, weak PMIs, and downward trending CPI could indicate that interest rate hikes may be nearing their peak.