August 21, 2019 / 2:55 PM / 2 months ago

FOREX-Dollar gains vs yen, Swiss franc as risk sentiment improves

    * All eyes on Jackson Hole meeting, Fed's Powell's speech
    * Fed minutes due out later on Wednesday
    * Euro little moved by Italian PM's resignation
    * Graphic: World FX rates in 2019 tmsnrt.rs/2egbfVh

 (Adds new comment, FX table, updates prices, changes byline, dateline; previous LONDON)
    By Gertrude Chavez-Dreyfuss
    NEW YORK, Aug 21 (Reuters) - The dollar rose against the safe-haven yen and Swiss Franc on Wednesday,
as risk appetite further improved with global stocks and U.S. yields higher ahead of an annual Federal
Reserve gathering later this week in Jackson Hole, Wyoming and a summit of major central banks this
weekend.
    Market participants are waiting for any statement from the Fed and other global monetary authorities
meeting at a Group of Seven summit this weekend on possible measures to lift slumping economies around the
world.
    Fed Chairman Jerome Powell's highly-anticipated speech in Jackson Hole on Friday comes after last
week's inversion of the U.S. yield curve - widely regarded as a recession signal. The curve inversion has
boosted expectations of another interest rate cut at its September policy meeting.
    The interest rate futures market has priced in 100 basis points of easing over the next year.
    Despite market expectations of a major speech from Powell, Ranko Berich, head of market analysis, at
Monex Europe in London believes the Fed chief is unlikely to make any big pronouncement in Jackson Hole. 
    "At the moment, the Federal Reserve is hyper-conscious of the fact that the president of the United
States is doing everything in his power to politicize monetary policy-making," said Berich.
    "What we're seeing from Powell's policies is to push from that politicizing very strongly, so a big
pontification speech at Jackson Hole is the complete opposite of what he's trying to achieve at the
moment," he added.
    Instead, Berich thinks Powell will reiterate his past comments that the U.S. economy is strong, the
Fed is easing out of an abundance of caution, and he doesn't see any upside risks to inflation.
    In morning trading, the dollar rose 0.2% against the yen to 106.43 yen, gaining in four of the
last five sessions.
    Against the Swiss franc, the dollar climbed 0.3% to 0.9808 franc.
    The dollar has also been supported by talk of more spending. U.S. President Donald Trump said on
Tuesday his administration was considering potential tax cuts on wages as well as profits from asset
sales.
    The Fed minutes of the last monetary policy meeting are also due out later on Wednesday, although that
is being overshadowed by the Jackson Hole meeting later this week.
    The euro, meanwhile, was slightly lower at $1.1096, moving little since Italy's Prime Minister
Giuseppe Conte resigned on Tuesday. Some investors believed the move made a snap general election less
likely.
    Credit Agricole strategist Manuel Oliveri expects the euro to strengthen towards $1.12 by September
even though the European Central Bank will struggle to exceed investor expectations for cutting rates.
    Talk of more fiscal spending in Germany and the hit to the U.S. yield advantage from falling interest
rates, should support the euro, he added.
    
    ========================================================
    Currency bid prices at 10:33 AM (1433 GMT)
 Description      RIC         Last           U.S. Close  Pct Change     YTD Pct     High Bid    Low Bid
                                              Previous                   Change                 
                                              Session                                           
 Euro/Dollar      EUR=        $1.1096        $1.1099     -0.03%         -3.25%      +1.1107     +1.1089
 Dollar/Yen       JPY=        106.4000       106.2200    +0.17%         -3.50%      +106.5900   +106.2300
 Euro/Yen         EURJPY=     118.09         117.90      +0.16%         -6.44%      +118.3200   +117.9200
 Dollar/Swiss     CHF=        0.9808         0.9778      +0.31%         -0.06%      +0.9812     +0.9776
 Sterling/Dollar  GBP=        1.2116         1.2168      -0.43%         -5.02%      +1.2175     +1.2114
 Dollar/Canadian  CAD=        1.3266         1.3314      -0.36%         -2.70%      +1.3327     +1.3255
 Australian/Doll  AUD=        0.6792         0.6776      +0.24%         -3.65%      +0.6799     +0.6774
 ar                                                                                             
 Euro/Swiss       EURCHF=     1.0882         1.0853      +0.27%         -3.31%      +1.0892     +1.0852
 Euro/Sterling    EURGBP=     0.9155         0.9117      +0.42%         +1.90%      +0.9162     +0.9117
 NZ               NZD=        0.6408         0.6414      -0.09%         -4.60%      +0.6422     +0.6397
 Dollar/Dollar                                                                                  
 Dollar/Norway    NOK=        8.9441         8.9814      -0.42%         +3.54%      +8.9988     +8.9354
 Euro/Norway      EURNOK=     9.9266         9.9713      -0.45%         +0.21%      +9.9843     +9.9205
 Dollar/Sweden    SEK=        9.6350         9.6864      -0.55%         +7.49%      +9.6941     +9.6228
 Euro/Sweden      EURSEK=     10.6928        10.7523     -0.55%         +4.18%      +10.7568    +10.6790
 
    
 (Reporting by Gertrude Chavez-Dreyfuss; Additional reporting by Tommy Wilkes in London
Editing by Nick Zieminski
)
  
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