Today marks the quiet start to what should be a very busy week for the foreign exchange markets; with Thursday’s Jackson Hole symposium being the key focus for traders as we come towards the end of August. The symposium is an annual meeting, sponsored by the Federal Reserve, aimed at gathering the world’s top financiers, bankers and economists to gather together to discuss the key financial challenges of the day. For foreign exchange markets, it is a perfect opportunity to focus on the speeches of Governors of national banks, such as the Fed’s Jerome Powell (13.10 GMT, Thursday) or the Bank of England’s Andrew Bailey (14.10 GMT, Friday) to pick-up on potential insights on how they intend to react ahead of their next interest rate meetings.
With monetary policy under microscopic scrutiny due to the continuing economic impacts of Coronavirus, it is unlikely that both Powell and Bailey will be able to escape the question of negative interest rates – an extremely sensitive topic for foreign exchange markets, especially on the pound and dollar, as neither have ever gone this low in their respective histories. Whilst both have steadfastly refused, at least in public anyway, to be considering such a move; the fear that it may even come up in conversation is enough to rattle markets.
Have a great week ahead.
Author: Joshua Haden-Jones, Senior Relationship Manager
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