US dollar edges higher ahead of Jackson Hole symposium

Emma Haslett
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Janet Yellen Holds News Conference On Fed Interest Rate Decision
Analysts aren't expecting much clarity from Janet Yellen (Source: Getty)

The dollar edged higher against the euro in early trading in Europe ahead of a closely-watched meeting of central bankers in Jackson Hole in Wyoming this week.

The dollar was 0.2 per cent higher against the euro, at €0.8517, and flat against sterling, at £0.7769, before the three-day central bankers' retreat, which kicks off on Thursday. Federal Reserve chair Janet Yellen and European Central Bank (ECB) chief Mario Draghi will both address their counterparts during the meeting.

Analysts are expecting tapering of quantitative easing programmes to be high on the agenda, while investors will watch Draghi's speech for a follow-up to minutes of an ECB minute published on Friday which showed its top policymakers are concerned about the strength of the euro.

However, analysts are expecting Yellen to keep schtum on the Fed's plans to wind up its own QE programme.

"The two stars of the gathering will undoubtedly be Mario Draghi and Janet Yellen," said Hussein Sayed, chief market strategist at FXTM.

"The most recent minutes from the Fed and ECB, shows that inflationary pressures remained absent, despite declining unemployment rates. When looking at bond yields across the globe, investors seem to be convinced that inflation isn’t returning anytime soon.

"However, financial asset prices are worrying central bankers, especially the Fed, which sees valuations as elevated."

Read more: Draghi and Yellen to hog spotlight at Jackson Hole retreat

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