The DXY index allows one to observe the broadening rise of the greenback. Given Jerome Powell’s Friday keynote speech at the forthcoming yearly Jackson Hole conference, the way could be paved for a potential breakthrough.
Meetings of central bankers in Wyoming in the past have sometimes indicated important changes in monetary policy. The Fed described increasing inflation as temporary at this time in 2021. Warnings are being raised in 202 over the persistence of considerably high inflation.
For hints on how committed the central bank is to bringing inflation back to its target of approximately 2%, the wording will be keenly scrutinized.
By expressing his worry about the unanchoring of inflation estimates, Neel Kashkari, chairman of the Federal Reserve Bank of Minneapolis, reaffirmed his status as a hawk.
As a result, there was considerable anticipation that the Federal Open Market Committee (FOMC) might raise interest rates by 100 bps next month. A 50 to 75 bps increase in the target level is the range of market pricing.
According to the general assumption, the Chair of the Federal Reserve, Jerome Powell, will use more diplomatic wording. Treasury yields may change dramatically if this discourse is broken, which could result in USD/JPY movements that are possibly disproportionate.
137.46 constitutes exactly 78.6% of the Fib seen in the price movement of the USD/JPY pair on August 22. The price could still play out as resistance since it has been unable to maintain itself over that mark.