
Here is what you need to know on Monday, August 25:
The US Dollar (USD) holds its ground early Monday but finds it difficult to gather recovery momentum following the intense selloff seen in the American session on Friday. Later in the day, Chicago Fed National Activity Index and New Home Sales data for July will be featured in the US economic calendar. Additionally, the Federal Reserve Bank of Dallas will publish the Texas Manufacturing Survey for August.
While delivering a speech on “Economic Outlook and Framework Review” at the annual Jackson Hole Economic Symposium on Friday, Fed Chair Jerome Powell said that they will adopt a new policy framework of flexible inflation targeting and eliminate 'makeup' strategy for inflation. Powell acknowledged that downside risks to the labor market were rising, while noting that it would be reasonable to expect that inflation effects of tariffs will be short-lived. These comments triggered a USD selloff heading into the weekend and the USD Index fell nearly 1% on the day, erasing all of its weekly gains in the process. In the meantime, Wall Street's main indexes rose more than 1% on Friday. US stock index futures were last seen losing between 0.1% and 0.2%.
EUR/USD rose sharply on Friday and closed the week marginally higher. The pair stays in a consolidation phase above 1.1700 in the European morning on Monday. IFO - Current Assessment and Business Climate data from Germany will be watched closely by market participants.
GBP/USD gained more than 0.8% on Friday and snapped a four-day losing streak. The pair stays relatively quiet and fluctuates above 1.3500 in the European session.
USD/JPY corrects higher and trades above 147.00 after losing about 1% on Friday. The data from Japan showed that the Leading Economic Index declined to 105.6 in June from 106.1 in May.
After spending the majority of the week below $3,350, Gold gathered bullish momentum on Friday and climbed to a two-week-high above $3,370. XAU/USD fluctuates in a narrow channel early Monday and holds comfortably above $3,360.
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