FX.co ★ Dollar Holds Gains Ahead of Powell Speech

The dollar index remained steady above 98.6 on Friday, staying close to a two-week peak as investors awaited insights from Federal Reserve Chair Jerome Powell's address at the Jackson Hole symposium. Market participants are keen on gaining clarity regarding the direction of interest rates, amid apprehensions that Powell might counter the prevailing expectations for an imminent rate cut. Current rate futures assign approximately a 75% likelihood to a 25 basis point reduction in September, a decrease from over 90% just a week prior. Policymakers have highlighted that tariff-related price pressures continue to present inflationary risks, although indications of labor market weakness remain minimal. In his recent comments, Kansas City Federal Reserve President Jeffrey Schmid noted that a "modestly restrictive" monetary policy continues to be appropriate given the ongoing inflationary challenges. Furthermore, Cleveland Federal Reserve President Beth Hammack stated she does not support rate cuts at this juncture.