020 7898 0500The US dollar dropped on Friday after Federal Reserve Chair Janet Yellen made no reference to US monetary policy in her speech at the Jackson Hole Economic Symposium. While investors didn’t expect Yellen to make any statements concerning policy, some market participants were hoping for some signals on the Fed’s planned balance sheet reduction. There had also been speculation that Yellen might have given some indication of whether US interest rates would increase in the near-future, but it wasn’t to be.
Instead, Yellen focused on US financial reforms. She said reforms put in place after the 2007 to 2009 crisis have strengthened the financial system without impeding economic growth, and any future changes should remain modest.
US core durable goods came out at 0.5% against an expectation of 0.4%, but given how marginal this positive was it did nothing to move the dollar. This week sees the release of US GDP figures on Wednesday, unemployment claims on Thursday and the all-important non-farm payrolls on Friday – the first day of the new month. The markets will be concentrated on continued speculation that the Fed can no longer increase interest rates in the way it originally intended.
