Dollar recovers some losses as markets await Fed signals at Jackson Hole
By Aboki Forex —
The US dollar showed signs of recovering some of last week's losses on Thursday as investors waited for signals on the Federal Reserve's monetary policy outlook from Jackson Hole.
The dollar drew support from US inflation data showing price pressures remained stronger than economists had expected. The data reinforced expectations that US interest rates could stay restrictive through the end of the year.
Sticky inflation and rate expectations
Persistently elevated inflation could reduce the Federal Reserve's scope to ease monetary policy and keep the possibility of further tightening in focus.
Markets also watched the Bank of Japan after comments on possible rate hikes. The yen barely moved. Markets see a chance of a BOJ hike next month.
Economic data and Fed focus
Separate economic data confirmed the US economy expanded at an annualised rate. The combination of persistent inflation and moderate economic growth leaves investors closely focused on the Federal Reserve's assessment of the balance between inflation risks and economic activity.
US weekly jobless claims data were due later.