Dollar wobbles as traders stick to the sidelines before Jackson Hole

Frankfurt (Aug 24)  The dollar wavered against the yen and the euro Wednesday, with investors reluctant to make aggressive moves ahead of Federal Reserve Chairwoman Janet Yellen’s speech at the central bank’s summer summit at the end of the week.

The U.S. dollar USDJPY, -0.01%  was changing hands at ¥100.19 yen, compared with ¥100.25 late Tuesday in New York. The euro EURUSD, -0.3449%  was at $1.1297, from $1.1306 on Tuesday.

The pound GBPUSD, +0.2273%  was buying $1.3190, little changed from $1.3193 late Tuesday in New York.

Investors largely remained on the sidelines as they await Yellen’s speech at the Fed’s annual symposium in Jackson Hole, Wyo., for more clarity on the central bank’s timeline for raising short-term rates.

“The past few days have shown the markets lose a little direction” ahead of her appearance, said Richard Perry, markets analyst at Hantec Markets, in a note.

“Subsequently, there is a lack of willingness to take a view [which] reflects the uncertainty of what Yellen could come up with. Major markets across forex and commodities have become especially plateaued, with dollar/yen and gold especially lacking impetus,” he added.

Many investors have avoided making bets on higher U.S. interest rates as recent economic indicators have been mixed. However, a series of hawkish signals from some Fed officials recently brightened the outlook for the U.S. central bank to raise rates this year.

The U.S. Dollar Index DXY, +0.21%  , which measures the greenback against a basket of rivals, was off less than 0.1% at 94.533. The WSJ Dollar Index BUXX, +0.11%  was up 0.1% at 85.74.

Having breached the ¥100-threshold four times since last week, investors “have grown accustomed to” the dollar’s downside, wrote Mizuho Securities chief forex strategist Kengo Suzuki in a note.

Source: MarketWatch