Overview
- Fed Chair Kevin Warsh’s Jackson Hole remarks on Friday prompted investors to price a greater chance of near-term Fed rate increases, driving a rapid market repricing of policy odds.
- U.S. two- and ten-year Treasury yields rose sharply as traders raised expectations for tighter U.S. policy, and those higher yields helped power the U.S. dollar’s advance.
- The U.S. Dollar Index approached the 99.20–99.25 pivot after the move, a technical zone traders say will help decide whether dollar gains extend.
- EUR/USD fell to test a key support cluster around roughly 1.157–1.159 that combines moving averages and Fibonacci retracements, and failure of that zone would open room for further losses.
- USD/CAD climbed to test last week’s swing highs and the 100-day moving average near 1.3914 as traders weighed stronger U.S. rates alongside ECB minutes that still point to possible further tightening and low near-term BoE tightening odds.