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Published on Wednesday, the minutes from the July meeting confirmed the intention of the Fed leadership to fight inflation resolutely, including by consistently tightening monetary policy. And this is a strong argument in favor of further strengthening of the dollar.
Next week, market participants will be watching the Fed's annual economic forum in Jackson Hole, Wyoming, which will bring together representatives of the world's leading central banks and economists. Statements by representatives of central banks may have a significant impact on national currencies. As it happened at the previous forums, at its opening (August 25) the head of the Federal Reserve, Jerome Powell, should speak. Undoubtedly, the main issue for market participants is the topic of tightening monetary policies by the world's leading central banks and their fight against galloping inflation.
In the meantime, the dollar is successfully recovering the positions lost in the previous 3 weeks, also strengthening against the traditional protective assets - the yen, franc, gold, and the DXY dollar index ends the week with a decent gain. Yesterday DXY decisively broke through the local resistance level 107.00, and today DXY futures are traded near 107.62 (at the time of publication of this article), returning to the ascending channel on the daily DXY chart and heading towards the next “round” resistance level 108.00. After the breakdown of the local multi-month high 109.14, reached in mid-July, the level 110.00 will become the next upside target for DXY.
Due to the lack of publications important for the market in today's economic calendar, most likely, the emerging trend of dollar strengthening today will continue until the end of the trading day.
