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Markets wait for Powell’s Keynote Speech


US stocks rallied on Thursday, as traders awaited Jerome Powell’s keynote for clues on how much further the Federal Reserve will pump the brakes on the economy to bring inflation back under control.  Investors were mostly unfazed by hawkish comments from Fed officials gathering for the annual conference in Jackson Hole, Wyoming. The Fed’s chair is widely expected to restate his resolve to keep tightening policy to fight inflationary spirals. Besides, traders will also be watching out for any signals about the pace of the Fed’s balance-sheet runoff, quantitative tightening, which gets up to full speed in September at a monthly clip of up to $95 billion.

The benchmarks, both S&P500 and Dow Jones Industrial Average advanced on Thursday, following the lowest trading day of 2022 for US equities, and volume was once again below average. All eleven sectors of S&P500 stayed in positive territory, as Material and Communication Service performed the best among all groups, rising by 2.26% and 2.06% on daily basis for the day. Benefit from mega-caps like Apple Inc. and Amazon.com Inc. jumped, Nasdaq 100 rallied with a 1.7% gain. The Dow Jones Industrial Average rose 1%, and the MSCI world index increased 1.3% on Thursday.

Main Pairs Movement

US dollar slid on Thursday, as investors awaited Federal Reserve Chairman Jerome Powell’s speech on Friday for further clues about the pace of the U.S. central bank’s rate hikes. The DXY index extended bearish momentum and dropped to a level around 108.0 in the first half on Thursday, then witnessed fresh upbeat transactions and oscillated from 108.4 to 108.6 level in the late UK trading session.

The GBP/USD was little changed up on Thursday, although the US greenback turned a little weak, a gloomy economic outlook in the UK weighed heavily on the cables. The pair climbed t a daily high level above 1.186 during the middle UK trading session, then slipped and volatile in a range from 1.800 to 1.845. Meanwhile, EUR/USD observed upbeat tractions in the first half of Thursday, then faced heavy selling pressure to wander between 0.995 and 0.998. The pair was little changed for the day.

Gold surged with a 0.43% gain on daily basis, as the FX domain turned volatile ahead of Jackson Hole Economic Symposium. The yellow metal edged higher to touch a daily high of $1,765 marks in the first half of Thursday, then corrected to around $1,757 marks.

Economic Data  

CurrencyDataTime (GMT + 8)Forecast
USDCore PCE Price Index (MoM) (Jul)20:300.3%
USDFed Chair Powell Speaks22:00