Synopsis:

Credit Agricole highlights the potential for upcoming Fed speeches, including those at the Jackson Hole Symposium, to provide support for the USD. With market expectations currently leaning towards a dovish Fed, the speeches could challenge these expectations and give the USD a boost.

Key Points:

• Jackson Hole Symposium Focus:

  • The Jackson Hole Economic Policy Symposium (22-24 August) is expected to be a pivotal event for FX markets, with Fed Chair Jerome Powell's speech on 23 August being the most anticipated.

• Additional Fed Speeches:

  • Speeches from Fed officials Christopher Waller, Raphael Bostic, and Michael Barr, along with the release of the July FOMC minutes, will also be closely watched.

• Market Expectations:

  • Credit Agricole believes that current market expectations are overly dovish regarding the Fed's future rate actions, with many Fed-related negatives already priced into the USD.

• Potential USD Boost:

  • If upcoming Fed speeches do not align with or exceed these dovish expectations, the USD could receive a boost across the board this week.

Conclusion:

Credit Agricole anticipates that the upcoming Fed speeches, particularly at the Jackson Hole Symposium, could provide the USD with a lift if they fail to meet the market's dovish expectations. This could result in a stronger USD in the near term.