US DOLLAR, DOW JONES, GOLD PRICE VOLATILITY ELEVATED AROUND FEDERAL RESERVE JACKSON HOLE SYMPOSIUM DATESThe Fed is scheduled to k
US DOLLAR, DOW JONES, GOLD PRICE VOLATILITY ELEVATED AROUND FEDERAL RESERVE JACKSON HOLE SYMPOSIUM DATES
The Fed is scheduled to kick off its annual financial coverage symposium at Jackson Gap this week. Federal Reserve officers host well-known central bankers and finance ministers from all over the world yearly to debate burning points dealing with international economies. It has been introduced that “Navigating the Decade Forward: Implications for Financial Coverage” is the subject for this yr’s Jackson Gap Symposium, which the Fed will livestream this Thursday and Friday, August 27-28.
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This high-impact occasion scheduled on the DailyFX Financial Calendar has potential to spark some critical volatility throughout the broader market – notably when considered towards a backdrop of unprecedented financial coverage intervention over current months to stave off financial turmoil attributable to the continued coronavirus pandemic. To not point out, the annual Fed symposium at Jackson Gap has traditionally catalyzed above-average readings of volatility for the US Greenback, Dow Jones, and gold.
US DOLLAR PRICE VOLATILITY ON JACKSON HOLE SYMPOSIUM DATES (CHART 1)
US Greenback foreign money volatility noticed is usually heightened round Jackson Gap Symposiums. That is indicated by intraday USD worth motion in the course of the symposium in comparison with its respective 5-day common true vary. The broader US Greenback Index might thus be susceptible to making outsized strikes within the days forward. That mentioned, the US Greenback might get a jolt if the Fed mentions adjustments to its view on rates of interest, inflation, the tempo of asset purchases going ahead, and even yield curve targets.
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Gloomy discussions of the lingering hostile impression the coronavirus pandemic has had on underlying financial situations might immediate an inflow of threat aversion and maybe gasoline demand for safe-haven currencies just like the US Greenback. Conversely, underscoring the necessity to maintain monetary situations accommodative and a ‘willingness to do extra’ might weigh negatively on the Buck. Obtain our complete US Greenback forecast for extra perception present in our free buying and selling information under.
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DOW JONES PRICE VOLATILITY ON JACKSON HOLE SYMPOSIUM DATES (CHART 2)
Volatility readings clocked by main inventory market indices just like the Dow Jones have been equally elevated across the annual Fed Symposium. Although this isn’t at all times the case, which can be as a result of seasonal summer time lull and corresponding volatility compression, shares might nonetheless swing wildly in response to remarks out of Jackson Gap.
| Change in | Longs | Shorts | OI |
| Each day | 16% | -12% | -4% |
| Weekly | -10% | -7% | -8% |
Doubts over sustaining the financial restoration since international GDP development collapsed earlier this yr stands out as one scorching matter with potential of fueling fairness volatility. However, if international central bankers stand dedicated to offering an abundance of liquidity and sustaining benchmark rates of interest at historic lows, the Dow Jones may proceed marching larger with valuation multiples and different risk-assets.
GOLD PRICE VOLATILITY ON JACKSON HOLE SYMPOSIUM DATES (CHART 3)
Gold worth motion usually intensifies across the Jackson Gap Symposium as properly. This comes as little shock seeing that rates of interest and inflation are two main drivers of the valuable steel’s route and are additionally two themes typically coated in nice element by the Fed at Jackson Gap. On that observe, gold costs appear like they’re sitting on the sting of a knife because the anti-fiat asset teeters round a important technical help degree after falling 7% from its all-time excessive printed earlier this month.
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The upcoming Jackson Gap Symposium might function a platform that gives gold worth motion with a powerful sufficient basic push that fuels a bigger breakdown or recommencement of the broader bullish development. Prematurely hinting at financial coverage exit methods for down the highway may roil gold bugs and encourage capitulation to current promoting stress, whereas suggesting the necessity to double down on current accommodative efforts may maintain valuable metals bolstered.
— Written by Wealthy Dvorak, Analyst for DailyFX.com
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