LONDON Reuters The dollar and the euro traded cautiously on Wednesday as investors refrained from taking risky bets a day ahead of a key speech by Federal Reserve Chairman Jerome Powell.
Rolled Euro banknotes are placed on U.S. Dollar banknotes in this illustration taken May 26, 2020. REUTERSDado RuvicIllustration
Amid growing speculation Powell could unveil a softer policy stance towards inflation at the annual Jackson Hole retreat on Thursday, investors are bracing for the Feds possible new steps to prop up the U.S. economy.
Either the Chairman drops something juicy for reflationistas aka USD bears or the USD rips higher for a few weeks, Stephen Innes, chief global markets strategist at AxiCorp, wrote in a morning note.
I would never bet against the Fed sounding dovish during an easing cycle, he added.
The dollar index, which tracks the greenbacks value against a basket of currencies USD was up 0.16 at 93.11 after taking a hit on Tuesday following data showing U.S. consumer confidence tumbling to the lowest in more than six years.
Data later on Wednesday is forecast to show growth in U.S. durable goods orders slowed in July, highlighting policymakers concerns about the economy.
A softerthanexpected figure should revive the Fed doves, while a betterthanexpected read would improve the investor mood, but should not have a material impact on dovish Fed expectations as it is clear to everyone that the economy needs sustained support for posting good results,…