Markets Hold Breath Ahead of Powell’s Jackson Hole Speech.

  • Dollar unmoved by FOMC minutes: July minutes now outdated given weaker jobs data; focus shifts to Powell’s Jackson Hole speech.

  • Bostic cautious on cuts: Open to easing but sees just one rate cut this year.

  • Euro pressured: Fading optimism on Ukraine peace, higher energy prices, and weak PMIs weigh on EUR sentiment.

  • Markets expect Powell dovish: Investors betting on a September rate cut; heavy positioning leaves room for disappointment.

  • GBP/USD vulnerable: A hawkish or non-committal Powell could drive sterling lower toward 1.3250.

USD: FOMC minutes fail to move the dial
The dollar was largely unmoved by last night’s release of July FOMC minutes. Since that meeting came before the latest jobs report, repeated references to a “solid” labour market now carry less weight. Markets are instead looking to Fed Chair Jerome Powell’s Jackson Hole speech tomorrow for clues on how seriously the Fed views the recent downward revisions to payroll data. Ahead of that, Fed member Raphael Bostic will speak today at 1330CET; while he has floated the idea of a cut, his base case remains just one move lower this year.

A detail from the minutes worth noting: foreign demand for US assets looks steady, with no evidence yet of tariff-driven selling. On the data front, today brings jobless claims, S&P PMIs and July home sales. Overall, the dollar outlook is neutral-to-slightly bearish, with strong Chinese markets adding a mild headwind. For now, DXY looks to trade between 98.00–98.50 into Powell’s speech. Political noise around Fed members, including calls for Lisa Cook’s resignation, briefly weighed on the dollar but isn’t expected to drive further weakness.

EUR: PMI spotlight, Ukraine risks resurface
EUR/USD remains stuck in narrow ranges, with sentiment around Ukraine again weighing on the single currency. Hopes for a ceasefire are fading; EUR/CHF slid back to 0.9370 as Russian Foreign Minister Lavrov stressed Moscow and Beijing must be involved in any future security guarantees. That stance highlights the ongoing gulf with the West and increases the likelihood of secondary US sanctions. Rising oil and gas prices over the last day add a further drag on the euro.

Flash PMIs for France, Germany, and the wider eurozone are released today, though no meaningful rebound is expected. EUR/USD is likely to continue bouncing within 1.1620–1.1670, with Powell’s Jackson Hole remarks the most likely catalyst for a breakout.

GBP: Traders brace for Jackson Hole disappointment
Markets are betting heavily that Powell will use Jackson Hole to signal a September rate cut, leaving the dollar vulnerable to a dovish surprise—or sterling at risk if Powell pushes back. He speaks Friday at 14:00 GMT in what will be his final appearance at the conference as Fed Chair.

This month’s softer inflation and jobs data encouraged bets on easier policy, but any reluctance from Powell to confirm those expectations could send the dollar higher. Analysts warn that markets may be overpricing September cut odds, and Powell could instead strike a cautious or even hawkish tone.

If he disappoints, GBP/USD could extend its current slide. Near-term supports sit at 1.3398 and 1.3364, while a deeper retracement could test the 1.3250 area—the 50% Fibonacci retracement from the 1.2712–1.3787 rally.

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