Dollar index holds onto gains in subdued trade

Dollar index holds onto gains in subdued trade
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(August 22, 2017) The dollar held onto gains against the other major currencies in subdued trade on Tuesday, as investors awaited the Jackson Hole Summit due to begin on Thursday.

Traders were looking ahead to this week’s annual meeting of top central bankers and economists in Jackson Hole, Wyoming, where the heads of the U.S. and European central banks will be making keynote speeches.

Their comments will be closely watched for fresh policy signals from the world’s two most powerful central banks.

Ongoing uncertainty over the economic agenda of U.S. President Donald Trump and doubts that the Federal Reserve will deliver a third rate hike this year have fed into recent dollar weakness.

The yen and Swiss franc were lower, with USD/JPY up 0.36% at 109.35 and with USD/CHF advancing 0.38% to trade at 0.9655.

However, geopolitical tensions persisted after North Korea unveiled a propaganda video of its threat to fire missiles near the U.S. territory of Guam.

Pyongyang threatened the U.S. with “merciless revenge” for ignoring its warnings over annual military drills with South Korea.

Elsewhere, EUR/USD slid 0.47% to 1.1760, while GBP/USD dropped 0.61% to 1.2823.

Data on Tuesday showed that confidence among German investors deteriorated for a third consecutive month in August.

The Australian and New Zealand dollars remained weaker, with AUD/USD down 0.18% at 0.7924 and with NZD/USD retreating 0.42% to 0.7297.

Meanwhile, USD/CAD edged down 0.16% to trade at a three-week low of 1.2538 after data showed that Canada’s retail sales rose less than expected in June, but the core reading was stronger than forecast.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was up 0.41% at 93.38 by 10:50 a.m. ET (02:50 p.m. GMT), off the previous session’s one-week low of 92.92.

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