Optimism about Fed action hits dollar, Bitcoin tops $50K, PMIs eyed

Optimism about Fed action hits dollar, Bitcoin tops $50K, PMIs eyed

Here is what you need to know on Monday, August 23:

The market mood has improved amid speculation that the Fed refrains from early tapering amid the rapid spread of the Delta covid variant. The safe-haven dollar is reversing some of its gains. Preliminary PMIs are high on the agenda, and Bitcoin is on the rise.

Risk-on: After a week dominated by concerns that the Federal Reserve would announce a tapering of its bond-buying scheme, investors are now foreseeing a delay. Robert Kaplan, President of the Dallas branch of the Fed, said he would consider postponing such a move in response to the impact of the Delta covid variant. Kaplan is a hawk and had previously pushed for withdrawing stimulus.

The focus is on the Fed's Jackson Hole Symposium and the speech by Chair Jerome Powell on Friday. Over the weekend, the bank announced that the event would be held virtually, a move seen as acknowledging the severity of the current wave of the disease.

Some speculate that Powell could use the Jackson Hole speech to signal a delay in withdrawing stimulus rather than bringing it forward. Markets are cheered by reports that the White House would extend Powell's term as Fed Chair by another four years. 

US coronavirus cases have hit a daily average of 149,000, ten times more than Continue Reading With FX Street

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