FX.co ★ Dollar Holds Steady Ahead of Warsh Speech

The dollar index was little changed around 99.1 on Friday as investors awaited Federal Reserve Chair Kevin Warsh’s speech at the annual Jackson Hole symposium later in the global day for fresh signals on the US interest rate outlook. Still, the greenback was set to end the week slightly higher after a hotter‑than‑expected US inflation reading earlier in the week bolstered expectations for a Fed rate increase before year-end, with the implied probability of a hike by December remaining above 70%. For the September meeting, markets are currently pricing in roughly a 65% chance that the Fed will leave rates unchanged.

Meanwhile, Kansas City Fed President Jeff Schmid said that monetary policy is not restraining the economy. At the same time, investors continued to weigh the implications of the US Treasury’s expanded debt buyback program, which has intensified concerns over the risks of a potential US debt crisis and associated downside risks for the dollar.