The U.S. dollar held near a one-week high on Friday as traders waited for Federal Reserve Chairman Kevin Warsh to speak at the Jackson Hole symposium in Wyoming.
The dollar index sat at 99.18, just below Thursday’s high of 99.26. Markets were largely inactive ahead of the 1400 GMT speech.
Inflation has stayed above the Fed’s 2% target. That has pushed traders to price in at least one 25 basis point rate hike this year, which has supported the dollar in recent days.
Warsh is known for offering little forward guidance. Analysts said he was more likely to give an update on the five internal Fed task forces he set up at the start of his term than to signal a rate move.
Commerzbank analyst Volkmar Baur raised the idea that the Fed could be considering a different measure of inflation beyond the PCE deflator. He said any hint of that would likely be seen as a dovish signal and could put pressure on the dollar.
On the sidelines of the Jackson Hole conference Thursday, several Fed officials repeated their concerns about inflation. They signaled they were open to rate hikes.
However, many analysts still expect the Fed to hold rates steady through the end of the year. ING’s Chris Turner said he does not think the Fed will hike in September or at all, with a year-end dollar/yen forecast around 158.
The euro fell slightly to $1.1646 and sterling dropped to $1.3589. Both were on track for their first weekly decline in a month.
The yen weakened to 159.645 per dollar. Tokyo inflation data showed annual core prices accelerated in August, a day after the Bank of Japan’s deputy governor called for timely rate hikes. Markets see a 68% chance the Bank of Japan hikes by 25 basis points next month.
Bitcoin dipped to $79,715 on Friday but remained on track for a 26.7% gain in August, its largest monthly rise since late 2024.
Some analysts pointed to concerns about U.S. debt levels as a driver of crypto gains this month.
The Australian dollar was headed for a ninth straight week of gains, sitting at a three-month high of $0.7197. The Canadian dollar was flat but set for its biggest weekly drop since mid-June after trade tensions with the U.S. rose.
Markets remained focused on Warsh’s speech as the main event of the day, with rate expectations and currency moves likely to shift once he speaks.
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