By Jiaxing Li
HONG KONG, Aug 28 (Reuters) – The U.S. dollar held firm near a one-week high against major peers on Friday, as investors stood on the sidelines ahead of Federal Reserve Chair Kevin Warsh’s speech at the Jackson Hole symposium hoping for clues on his policy outlook.
The euro and sterling were subdued near one-week lows against the greenback, last at $1.1645 and $1.3588, respectively, though both remained on track for a second straight monthly gain.
The yen also weakened a touch to 159.55 per dollar, having surrendered part of its intervention-driven gains, but it was still headed for a 1.3% monthly rise.
The dollar index, which measures the currency against six major peers, was a shade higher at 99.18.
It has risen 0.3% this week but remains on track for a second straight monthly decline of 0.6%, after U.S. Treasury Secretary Scott Bessent said the Treasury would increase buybacks of longer-dated bonds. That has fuelled concerns that efforts to suppress borrowing costs could debase the dollar.
Market participants are keenly awaiting Warsh’s debut speech in Jackson Hole, Wyoming slated for 1400 GMT, for clues on how he would approach monetary policy, inflation, and recent volatility in bond markets, although those expectations were tempered by his opposition to providing explicit forward guidance on rates.
Some other Fed officials reiterated on Thursday their ongoing concerns about U.S. inflation and signalled they were open to rate hikes.
“Markets are in wait-and-see mode ahead of Fed Chair Warsh’s Jackson Hole speech. Any sign of policy alignment between Warsh and Treasury Secretary Scott Bessent could reinforce expectations of lower curve volatility and weigh on the USD,” analysts at Citi said in a note to clients.
The latest U.S. inflation data shows that price pressures persisted, boosting investors’ bets on a Fed rate hike next month. Traders were pricing in roughly 35% odds of a hike at the Fed’s September meeting, rising to 75% by December.
Treasury yields also remain elevated ahead of the meeting, with those on benchmark U.S. 10-year notes last at 4.68%.
In cryptocurrencies, bitcoin briefly climbed above $81,000 before paring gains. It was on track for a nearly 30% rise in August that would be its biggest monthly gain since late 2024.
The Australian dollar was up as much as 0.1% to hit a three-month high of $0.7205 as rate hike bets built up. The New Zealand dollar climbed 0.1% to $0.5955.
The Canadian dollar held flat at $1.3844 and was heading for a second month of decline after trade tensions with the U.S. escalated.
Elsewhere, Brent crude futures hovered near $90 a barrel after a Wall Street Journal report suggested President Donald Trump had rejected the idea of re-establishing the terms of the memorandum of understanding the U.S. signed with Iran in June.
(Reporting by Jiaxing Li; Editing by Jamie Freed and Kim Coghill)
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