US Wakes Up to Uncertain Recovery
The US index finished indecisively yesterday as it failed to close above the 93 handle again.
The first day of the Jackson Hole Symposium concluded with the Federal Reserve adopting a new strategy for inflation. The central bank will now target an average of 2% inflation, rather than a 2% fixed goal. This confirmed expectations that the US central bank will keep interest rates at low levels for years to come.
Initial jobless claims were positive as the US recorded 93K fewer claims than the previous month. However, the figure still remains around the 1-million mark indicating a sluggish resurgence ahead for the US economy.
Greenback Fails to Penetrate Rivals
Euro and pound finished relatively flat in yesterday’s session as day one of the Jackson Hole summit ended.
Inflation news coming out of the event created volatility in the EURUSD and GBPUSD pairs. However, this was short-lived as retracements soon kicked in on risk sentiment.
The euro was unable to recapture its lofty level above 1.19.
In addition, the pound failed to maintain its bullish bias as it ended the session below 1.32.
The Fed Drives Indices Higher
SP500, NASDAQ, and DJ30 prices were all supported on Thursday.
The Fed’s average inflation target managed to maintain the recent record highs seen across the board. The focus will now shift to day 2 of the summit for further indications on preserving the US economy.
Focus Shifts to Day 2 of Symposium
Gold finished 1.30% lower yesterday after a volatile session.
Jerome Powell’s declaration regarding changes to the central bank’s policy initially lifted the yellow metal by over $30.
However, gold traders resorted to profit taking as early reports indicated the speech would mention inflation, claiming that it was not ‘fresh news’.
As we move onto day 2, will there be any surprises?
Laura Weakens As Oil Production Looks to get Back to Business
WTI closed 1% lower on Thursday putting an end to the 3-session streak of gains.
Historically, hurricanes have led to extensive lock downs in oil refineries. However, early indications are that production will be immediately restored following the aftermath. Therefore oil traders will look for a quick recovery following Hurricane Laura.
With hurricane season in full flow, could further storms affect future prices?