Dollar remains offered after dovish Powell.
30 August 2021
The greenback slid on Monday, following a large drop on Friday as Jerome Powell disappointed dollar bulls with his Jackson Hole speech.
At the time of writing, the EURUSD pair was trying to break above the first important resistance at 1.18.
Mr. Powell failed to announce when the tapering will officially begin, with many economists had expected November or possibly September as the starting month.
He only said that "if the economy evolves broadly as anticipated, it could be appropriate to start reducing the pace of asset purchases this year.” Earlier in the month, several FOMC speakers said that the Fed needs to start tapering sooner rather than later. Thus Powell failing to say the starting month was a negative surprise.
Additionally, he reiterated that tapering is not tightening, and the Fed will keep rates at the current levels for a long period of time. Overall, it was a pretty dovish statement. As a result, stock markets, precious metals, and bonds soared while the USD dropped sharply.
From other news, German inflation data are due, and the CPI index is expected to rise further to 3.4% year-on-year, but the ECB just doesn't care and will continue to print money at an unprecedented pace nevertheless.
During the US session, pending homes sales data are due, along with August's Dallas Fed Manufacturing business index.