The U.S. dollar inched upward on Thursday, trading just below a one-week high as investors prepared for the Federal Reserve’s Jackson Hole symposium.
By 04:40 ET (08:40 GMT), the Dollar Index, which tracks the greenback against six major currencies, was up 0.1% at 98.114, following a session-high on Wednesday—the strongest level since August 12.
Fed Minutes Provide Mild Support
The dollar drew some support after the Fed’s July meeting minutes were released on Wednesday, showing that most policymakers remain focused on labor market conditions and inflation risks. The two dissenting members who favored a rate cut were not joined by other board members.
“Almost all participants viewed it as appropriate to maintain the target range for the federal funds rate at 4.25% to 4.50% at this meeting,” the minutes of the July 29-30 meeting said.
The central bank has kept rates in the 4.25%-4.50% range throughout the year. Some officials, including Chair Jerome Powell, have expressed concern that tariffs imposed by the Trump administration could push inflation higher. Weekly jobless claims data, expected later Thursday, may reflect a slight softening in the labor market after weak payroll numbers earlier this month.
Trading could remain subdued as market participants brace for potentially market-moving developments from Jackson Hole over the next three days.
“We’re all waiting on tomorrow’s speech from Fed Chair Jerome Powell as to how significantly the Fed registered the substantial downward revisions to back-month job data,” said analysts at ING, in a note.
“Before then …we’ll have a speech from the Fed’s Raphael Bostic. He’s recently been saying he could vote for a rate cut soon, although one rate cut this year is his preferred adjustment.”
Euro Gains on PMI Boost
In Europe, the euro strengthened slightly, with EUR/USD rising 0.1% to 1.1656, helped by data showing a rise in new orders in August—the first since May 2024. The reading pushed overall eurozone activity to its fastest pace in 15 months despite ongoing weakness in exports.
The HCOB Flash Eurozone Composite Purchasing Managers’ Index, compiled by S&P Global, increased to 51.1 from 50.9 in July, marking the third consecutive monthly gain and the highest level since May 2024. A PMI above 50 signals growth, while below 50 indicates contraction.
“EUR/USD is becalmed. It’s fair to say that the optimism over a potential ceasefire/peace deal in Ukraine is now fading,” said ING. “We may see another tight 1.1620-1.1670 trading range in EUR/USD today, with the biggest chance of a breakout remaining Powell’s speech tomorrow.”
GBP/USD also ticked up 0.1% to 1.3466 after stronger-than-expected U.K. activity data. The U.K. Composite PMI rose to 53.0 in August from 51.5 in July, above the expected 51.6.
Stability in Asia
In Asia, USD/JPY climbed 0.1% to 147.55, as Japanese factory activity contracted at a slower pace in August, nearing a return to expansion. USD/CNY edged slightly higher to 7.1769 after the People’s Bank of China held its benchmark loan prime rates steady.
AUD/USD slipped 0.1% to 0.64234, while NZD/USD remained stable at 0.5822, after falling to its lowest point since mid-April following a 25-basis-point rate cut by the Reserve Bank of New Zealand.
This content is for informational purposes only and does not constitute financial, investment, or other professional advice. It should not be considered a recommendation to buy or sell any securities or financial instruments. All investments involve risk, including the potential loss of principal. Past performance is not indicative of future results. You should conduct your own research and consult with a qualified financial advisor before making any investment decisions.