• USD net spec short rose by $1.51bn in Aug 13-19 IMM period; $IDX +0.23%

• Data may mislead after today's USD slide post-dovish Powell at J-Hole

• EUR$ -0.21% in period, spec +3.3k contracts now +118.7k; EUR bulls bottom-fish

• $JPY -0.11%, specs +3.3k contracts now +77.6k; traders sell into USD strength

• GBP$ -0.04%, specs +13.9k contracts now -25.2k; UK fiscal concerns abate

• $CAD +0.68%, specs -3k contracts now -93.1k; soft CA CPI may prod further BoC cut

• AUD$ -1.2%, specs -7k contracts now -94.9k, RBA seen on more-dovish tack weighs

• Next key data Aug 29 US PCE prc Idx, Aug NFP Sept 5 will be parsed for policy clues

Majors w/IMM Performance Chart:


IMM Position Table:


(Paul.Spirgel is a Reuters market analyst. The views expressed are his own)

• NY opened near 0.6420 after 0.6416 traded overnight, pair gained in early trading

• Rally then intensified as Fed's Powell's comments were deemed dovish by the market

• Powell appeared to focus more on downside employment risks than inflation risks

• US yields , US$ fell sharply; USD/CNH turned lower & fell to 7.1666

• AUD/USD rallied above 0.6500, pair traded up +1.14% in NY's afternoon

• Gains for equities , gold reinforced U$ selling, buoyed AUD/USD

• Techs lean bullish; RSIs are rising, AUD/UD rallied above the daily cloud top and 10-DMA
audusd


(Christopher Romano is a Reuters market analyst. The views expressed are his own)

Synopsis

MUFG argues that Powell’s Jackson Hole speech has laid the groundwork for renewed Fed easing, while other major central banks are turning less dovish. This divergence could trigger another leg lower for the USD and higher FX volatility, particularly if September’s payrolls confirm further labor market weakness.

Key Points

• Fed stance softening: Powell acknowledged that downside risks to employment are rising and that they could materialize quickly in the form of layoffs. A similarly weak September jobs report would provide the green light for the Fed to resume rate cuts as soon as next month.

• Other central banks less dovish:

  • ECB and BoE: less likely to cut further in 2025 given resilient inflation and stabilizing growth.

  • BoJ: speculation is building that it could resume rate hikes before year-end, underpinned by stronger Q2 GDP and improving confidence after recent trade deals.

• Policy divergence narrative: With the Fed moving toward easing while peers hold steady or tighten, USD faces downside risk.

• Volatility outlook: A shift in policy paths could trigger a rebound in FX volatility after a period of calm driven by synchronized “on hold” stances.

• JPY positioning: IMM data show leveraged funds have been rebuilding JPY shorts for five consecutive weeks, leaving positioning stretched. This creates a setup where renewed Fed easing and potential BoJ hikes could drive a sharp JPY rebound.

Conclusion

MUFG sees Powell’s remarks as the opening act for a new phase of USD depreciation. With policy divergence between the Fed and other central banks widening into autumn, FX volatility is likely to pick up, and the USD—especially against JPY—remains vulnerable to renewed downside.

• Shares of silver miners gain, tracking rising prices of the metal [GOL/]

• Spot silver up 2.3% at $39.021/ounce, buoyed by heightened expectations of a September rate cut following comments from Federal Reserve Chair Jerome Powell at the central bank's Jackson Hole symposium

• Hecla Mining rises 3.4% and Coeur Mining up 4.4%

• Canadian miners Endeavour Silver up 2.9% and Silvercorp Metals rises 2%

• Abrdn Physical Silver Shares ETF and iShares Silver Trust each up 2.4%

(Reporting by Pooja Menon in Bengaluru)

Synopsis

CIBC interprets Powell’s Jackson Hole speech as leaving the door wide open for rate cuts to resume, with September now firmly in play. While Powell highlighted that the labor market is “in balance,” he underscored rising downside risks, and he confirmed a shift back to a flexible inflation targeting framework.

Key Points

• Labour market risks: Powell noted that weaker job growth and slowing immigration have brought labor demand and supply into balance. However, this balance makes the economy more vulnerable to a quick deterioration via layoffs and higher unemployment.

• Tariff impact on inflation: Powell acknowledged that tariffs are now “clearly visible” in inflation data. While calling this a one-time price-level shock, he emphasized the Fed would not allow it to morph into persistent inflation.

• Policy stance: With rates still above neutral, though less so than a year ago, Powell suggested the balance of risks “may warrant” easing, but stressed the Fed would “proceed carefully.” This indicates gradual cuts are coming, though without a firm pre-commitment to September.

• Framework review: Powell confirmed the Fed is abandoning the “makeup” strategy introduced in 2020 and returning to a flexible inflation targeting regime. He also adjusted labor market language to reflect the difficulty in measuring full employment in real time.

• Key data ahead: CIBC stresses the September payrolls report will be decisive in determining whether cuts begin in September or are delayed to October.

Conclusion

CIBC sees Powell’s remarks as setting the stage for renewed easing, with September firmly on the table but not locked in. The message was cautious but clear: risks are tilted toward labor market weakness, tariffs are transitory, and the Fed’s framework is being recalibrated to emphasize flexibility. Markets now await payrolls as the final trigger.

• Fed chair Powell said shifting balance of risks may warrant adjusting policy stance

• Powell also commented on jobs saying downside risks to labor market are rising

• Powell also said reasonable base case is inflation effects of tarrifs to be short lived

• US yields , U$ fell sharply, US-DE spreads

tightened

• EUR/UD spiked up to 1.1677, traded up +0.52% as of this writing

• Gold added to gains, stocks rallied sharply to reinforce US$ selling

• Techs are bullish; RSIs rising, daily bull engulfing candle has formed

• The pair's rally above daily cloud top, 10-, 21- & 55-DMAs adds to bullish tech signals
eurusd


(Christopher Romano is a Reuters market analyst. The views expressed are his own)

Synopsis

Ahead of Powell’s Jackson Hole speech, banks differ on whether the Fed Chair will lean dovish enough to tee up a September rate cut or keep markets guessing. Goldman Sachs expects Powell to stress labor market risks without explicitly committing to cuts, BofA sees markets fading any USD bounce as Powell likely won’t sound as dovish as priced, and Credit Agricole warns Jackson Hole could be a “non-event,” leaving traders waiting for September’s key US data.

Key Points

• Goldman Sachs:

  • Powell likely to adjust his July message that the Fed is “well positioned to wait.”

  • Expected to emphasize growing downside risks to employment after weak July jobs.

  • Tariffs framed as one-off price shocks.

  • No definitive signal for September, but speech should imply Powell’s support for easing.

• BofA:

  • Market expects Powell dovish, but Fed may resist being pinned down.

  • Powell’s reaction to stagflationary data (slower jobs vs sticky inflation) is the focal point.

  • BofA’s FX team expects USD appreciation post-speech to be faded, consistent with bearish USD stance.

  • Historic Jackson Hole FX impacts modest, but Powell’s tone will shape September cut odds.

• Credit Agricole:

  • Powell faces conflicting demands: prepare markets for cuts while distancing from FAIT.

  • Risk that the speech lacks clarity, leaving traders waiting for Core PCE (Aug 30), NFP (Sept 5), and CPI (Sept 10).

  • Market expects two cuts by year-end, but speech may validate without adding conviction.

  • Risks skewed: a dovish surprise could push USD lower; hawkish surprise less market-moving.

Conclusion

Jackson Hole may reinforce market conviction for a September cut without Powell explicitly committing. Goldman sees implicit dovish lean, BofA expects Powell to sound less dovish than markets hope, and Credit Agricole flags a non-event scenario that keeps ranges intact until September data. For FX, the USD’s direction hinges on labor market signals—a dovish tilt would weigh on the dollar, while a neutral/hawkish Powell likely sustains consolidation until key September releases.

• AUD/USD fell to 0.6416 in Europe's morning then rallied to 0.6432, sellers emerged

• NY opened near the overnight low, pair traded down -0.05% in early action

• US yield , US$ gains weighed; USD/CNH rally to 7.1895 added weight

• Drops in gold and iron-ore helped to weigh down AUD/USD

• Techs lean bearish; RSIs fallong, monthly gravestone doji inplace for August

• AUD/USD's hold below the daily cloud, slew of DMAs adds to bearish signals

• July Fed national activity index, US new home sales are data risks in NY

• Impact from data likely to be muted as Fed Chair Powell speaks at 10:00
audusd


(Christopher Romano is a Reuters market analyst. The views expressed are his own)

(Corrects headline)

• EUR/USD remains stuck in the doldrums: desperate for a breakout driver

• Breakout risk currently strengthening to the downside

• Euro continues to edge lower but the Friday range is tight

• A sideways biased daily Ichimoku cloud contains: 1.1448-1.1650

• Daily Bollinger bands are tightening: points to reduced volatility

• Bear market eyes a key 50% Fibo level (1.1392-1.1730) at 1.1561

• Focus on the U.S. Fed policy outlook and fears for its independence

• Fed's Powell talks later in the day: rate cut bets have been pared

• Ukraine-Russia peace potential slipping: leaning on the euro

• Putin's demands to Ukraine: give up Donbas, no NATO, no Western troops
EUR/USD daily candle chart:


(Peter Stoneham is a Reuters market analyst. The views expressed are his own)

• U.S.-listed shares of gold miners down premarket, tracking decline in bullion prices [GOL/]

• Spot gold down 0.4% at $3,326.35/ounce, due to a firmer U.S. dollar, with markets awaiting Federal Reserve Chair Jerome Powell's speech at the annual Jackson Hole symposium for more insight on the Fed's monetary policy path

• The dollar index rose to a near two-week high as investors pared back expectations for a Fed rate cut in September [USD/]

• Top miners Newmont down marginally and Barrick Mining down ~1%

• South African miners AngloGold Ashanti down 3.2%, Harmony Gold down 1.6% and Sibanye Stillwater down 1.5%

• Canadian miners Agnico Eagle Mines down marginally and Kinross Gold down ~1%

(Reporting by Pooja Menon in Bengaluru)

• AUD sees a slight reprieve as eyes turn to Powell's Jackson Hole speech

• Fed Chair due to speak at 1400GMT

• Hawkish Powell risk should limit the rebound in the AUD

• Therefore, keeping the bear bias intact with room for a test of the 200DMA

• Clean break of the 200DMA (0.6384) would open door to 0.63

• Resistance sits at 0.6459 (100DMA) and 0.6500
AUDUSD daily chart

(Justin McQueen is a Reuters market analyst. The views expressed are his own.)

• GBP (-0.04%) maintains recent losses ahead of Powell's speech

• Unwind of rate cut bets underpins USD (70/30 split for a 25bp Sept cut)

• A non-committal Powell would likely fuel a larger bid in the greenback

• Would open the door for cable to test 1.3380 and 1.3300

• Gilt yields also pressing on 4.75% ahead of danger zone

• Clean break of 4.75% would likely weigh on GBP given fiscal backdrop
GBPUSD hourly chart

(Justin McQueen is a Reuters market analyst. The views expressed are his own.)

• AUD/USD +0.1% Fri in quiet trade ahead of Jackson Hole economic symposium

• Fed Chair Jerome Powell speaking Fri, likely to recalibrate markets

• Confidence in Fed rate cut bets slipping on fears of hawkish tone

• DXY +2.4% from Jul 1 96.37 low, sitting well above important 98.12 55-DMA

• Major AUD support between 0.6384 200-DMA & 0.6373 Jun 23 low

• U.S. Jul durable goods due Tue (poll -4.0% m/m), AU CPI data Wed

• Range Asia 0.6420-30, support 0.6415 0.6384 0.6373, resistance 0.6625
USD Index Daily 55-DMA


AUD daily 200-DMA & Support/Resistance

(James Connell is a Reuters market analyst. The views expressed are his own.)

• Off 0.05% at the base of a 1.1591-1.1615 range, as Ukraine optimism fades

• Putin's demand to Ukraine: give up Donbas, no NATO, no Western troops

• Russia and Ukraine appear to be a long way from a viable ceasefire deal

• Charts- Negative daily momentum studies, 5, 10 & 21-day moving averages fall

• 21-day Bollinger bands base contract - the daily signals are net negative

• Resistance starts at last week's 1.1730 high, then July 7 1.1789 range top

• A close below last week's 1.1590 base would be bearish for next week

• 1.1550 300mln, 1.1600 1.373 BLN, 1.1650/60 1.298 BLN close Aug 22nd strikes
Andy

(Andrew Spencer is a Reuters market analyst. The views expressed are his own.)

• Stop-fishing sees USD/JPY to 148.67 in thin Asian trading but no follow

• High of last week at 148.63, eclipsed by a few ticks but no stops hit

• Lack of further upside could see USD/JPY lower again, low today 148.29

• Tech resistance topside at descending 200-DMA at 149.13

• 200-DMA and 100-DMA down at 145.49 seen wider parameters for pair now

• Asia trading likely to remain thin, maybe Europe/London too

• All financial markets look to be on tenterhooks into Powell speech tonight

• Related , for more click on [FXBUZ]

USD/JPY hourly:

(Haruya Ida is a Reuters market analyst. The views expressed are his own)

• AUD/USD +0.1% Fri in subdued trading amid waning confidence on Fed rate cuts

• Traders cautious of a hawkish leaning Fed Chair Powell's Jackson Hole speech

• DXY +2.4% from Jul 1 96.37 low, trading clear above important 98.12 55-DMA

• AUD support between 0.6384 200-DMA & 0.6373 Jun 23 low, mind the gap below

• U.S. Jul durable goods due Tue (poll -4.0% m/m), AU CPI data Wed

• Range Asia 0.64205-295, support 0.6415 0.6384 0.6373, resistance 0.6625
USD Index Daily 55-DMA


AUD Daily 200-DMA & Support/Resistance

(James Connell is a Reuters market analyst. The views expressed are his own.)

• USD/JPY mini-rally yesterday on maybe hawkish Fed Powell, as US yields rise

• USD/JPY to 148.40 EBS, still bid in Asia so far today between 148.31-46

• Despite rise, pair still in 146.22-148.63 range established last week

• Wider likely parameters still defined by 100/200-DMAs 145.49/149.13

• No change in narrowing trend in JGB-US Treasury interest rate differentials

• On options front, large $2 bln in expiries today between 147.85-148.00 below

• Smaller expiries to upside at 148.00, 149.00, $882 mln between 150.00-25

• Despite bump up in USD/JPY, range-trading still in effect into Powell-speak

• Related comments , , ,

• Also , on US data , Japan news

• On the Fed , , ,

• US markets , , ,
USD/JPY:


JGB-US Treasury 2-year interest rate differential:


USD/JPY nearby option expiries into next week:

(Haruya Ida is a Reuters market analyst. The views expressed are his own)

• +0.05% after closing down 0.35% with the U.S. dollar up 0.4%

• Putin's demand to Ukraine: give up Donbas, no NATO, no Western troops

• Russia and Ukraine appear to be a long way from a viable end to the war

• Euro zone business activity accelerated in August as new orders grew - PMI

• Charts- Neutral daily momentum studies, 5, 10 & 21-day moving averages fall

• 21-day Bollinger bands base contract - the daily signals show no strong bias

• Resistance starts at last week's 1.1730 high, then July 7 1.1789 range top

• A close below last week's 1.1590 base would turn the daily signals bearish

• 1.1600 1.373 BLN, 1.1650/60 1.298 BLN close Aug 22nd strikes
Andy

(Andrew Spencer is a Reuters market analyst. The views expressed are his own.)

• AUD/USD -0.2% from Thur 0.64365 high as conviction wavers on Fed rate cuts

• Traders wary of Powell's Jackson Hole address, hawkish tone a clear risk

• USD index +0.5% from Thur 98.18 low; UST yields rose across the curve

• U.S. continuing jobless claims hit 1.972 mln, highest level since Nov 2021

• AUD support between 0.6384 200-DMA & 0.6373 Jun 23 low, break below bearish

• U.S. Jul durable goods due Tue (poll -4.0% m/m), AU CPI data Wed

• Overnight range 0.6415-32, support 0.6415 0.6384 0.6373, resistance 0.6625
AUD Daily 200-DMA & DXY Daily 55-DMA

(James Connell is a Reuters market analyst. The views expressed are his own.)

Synopsis

Danske continues to recommend buying EUR/USD on dips, noting the pair’s mid-1.16 to 1.17 range trade amid quiet markets. With Powell’s Jackson Hole speech looming, they expect a neutral tone that could temper current market expectations for a September rate cut.

Key Points

• Range trading: EUR/USD remains steady in the 1.16–1.17 zone, with the USD modestly firmer across G10 this week.

• Jackson Hole focus: Markets are watching Powell’s remarks for confirmation of a September 25bp cut (~85% priced). Unlike 2024, Powell is expected to avoid dovish signals and strike a more neutral balance given mixed data.

• Fed minutes: The July meeting minutes showed inflation concerns still outweigh labor market risks, with tariffs’ full impact yet to be seen. Market reaction was muted since data has shifted significantly since July.

• Tactical stance: Danske advises buying EUR/USD on dips, maintaining a constructive tactical view.

Conclusion

Danske sees the recent EUR/USD consolidation as an opportunity to build long positions on pullbacks, with Jackson Hole and incoming US data as potential catalysts for renewed upside momentum.

• NY opened near 0.6430 after 0.6437 traded overnight, the selling persisted

• S&P Global PMI & Aug. Philly Fed reports rallied US yields , US$

• USD/CNH gained while gold , stocks fell to reinforce US$ buying

• AUD/USD hit a 2-month low of 0.6415, neared 0.6425 late, was down -0.12% late

• Monthly gravestone doji, falling RSIs, hold below daily cloud, many DMAs are bear signs

• Investors await Fed Chair Powell's Jackson Hole speech and how it impacts risk
audusd


(Christopher Romano is a Reuters market analyst. The views expressed are his own)

Synopsis

ANZ expects the Fed to resume easing in September with a 25bp rate cut, arguing that a weakening labour market and transitory tariff-related inflation pressures support renewed accommodation. They also highlight potential shifts in the Fed’s framework review, away from FAIT toward a fixed 2% inflation target.

Key Points

• Jackson Hole focus: Theme is “Labour Markets in Transition.” Chair Powell’s speech will be closely watched for signals on easing and the policy framework review.

• Policy framework: ANZ anticipates the Fed may move away from flexible average inflation targeting (FAIT) to a fixed 2% medium-term inflation target, reflecting inflation dynamics post-GFC and the recent overshoot.

• Labour market risks: Weak hiring momentum, rising downside risks to employment, and a falling participation rate have kept unemployment artificially low, adding urgency to easing.

• Tariff effects: ANZ judges tariff-driven inflation as transitory, with recent PPI increases largely concentrated in services and already reflected in CPI.

• Policy call: ANZ expects a 25bp cut at the September 16–17 FOMC meeting, followed by a gradual easing cycle.

Conclusion

ANZ sees the Fed preparing to act at the September meeting, with Jackson Hole unlikely to deliver a definitive pre-commitment but expected to reinforce labour market risks. With tariffs seen as temporary and employment fragility growing, the case for rate cuts is strengthening.

• Ether traded down -2.36% heading into Europe's close, neared 4255.00

• Gains in US yields and the US$ weighed down Ether

• It fell away from 4375/85 resistance & 10-DMA but techs still lean bullish

• Monthly RSI is rising and yesterday's bull hammer candle remains valid

• The hammer formed after the 50% Fib of 3359.20-4788.78 was pierced Wednesday

• Ether bulls need the 3950.00/4100.00 zone to hold for the broader up trend to hold

• Fed Chair Powell's Jackson Hole speech Friday could determine if the rally resumes
eth


(Christopher Romano is a Reuters market analyst. The views expressed are his own)

Synopsis

BofA has turned more USD-bearish, revising its EUR/USD forecasts upward. They now project 1.20 by end-2025 and 1.25 by end-2026, compared with prior forecasts of 1.17 and 1.20. This places BofA’s outlook above the Bloomberg consensus (1.18 for 2025 and 1.22 for 2026).

Key Points

• Constructive EUR stance: BofA remains bullish on EUR vs USD, JPY, and CHF, while staying neutral to bearish on EUR vs other G10 peers such as GBP and AUD.

• ECB vs Fed: Economists lean dovish on the ECB versus markets, which tempers enthusiasm for certain EUR crosses. Still, the ECB’s ability to add stimulus contrasts with the Fed’s stagflationary trade-offs.

• Europe’s lowered bar for positive surprises: Following the US–EU trade deal, expectations for European/German upside surprises are lower. Fiscal and defense spending hopes in Europe stand against policy fears in the US, UK, and Japan.

• Hedging flows supportive: USD hedging remains a driver for EUR upside, with positioning long but not overstretched.

• Forecast revision: EUR/USD revised to 1.20 (end-2025) and 1.25 (end-2026), more bullish than both their prior forecasts and consensus.

Conclusion

BofA’s latest revision reflects growing conviction in USD weakness and EUR resilience. While cautious on select EUR crosses, they see EUR/USD on a firm upward path supported by hedging flows, fiscal hopes in Europe, and relative policy flexibility versus the Fed.