Currency traders turned bearish on the dollar as Federal-funds futures showed a 40% chance the Fed would lift rates this year, down from 50% earlier this week, according to CME Group data.
Looking ahead, traders will have to wait for Fed Chair Janet Yellen’s comments later this month at the meeting of global policy makers in Jackson Hole, Wyoming to find any more guidance on the central bank’s outlook. The Fed will release its next policy decision on September 21.
“Yet markets continue to be a step ahead of policy makers, Goldman Sachs analysts Robin Brooks and Michael Cahill wrote Friday, limiting the prospects for a tumble in the dollar. Derivatives traders are fully pricing in just one rate hike over the next three years, overnight index swaps show. The next key policy signal will come when Fed Chair Janet Yellen speaks Aug. 26 in Jackson Hole, Wyoming,” according to Bloomberg.
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PowerShares DB U.S. Dollar Index Bullish Fund