US FX WRAP: Dollar gains on Fed Chair Warsh's net hawkish Jackson Hole address

The Dollar Index saw strength on Friday and gained after Fed Chair Warsh's remarks; the Chair remarked inflation data don’t suggest the trend has meaningfully improved, and that the 2% PCE objective is firm and there’s work to do if inflation not moving fast enough to 2%. Overall, the Chair gave a little bit more than expected and was net hawkish, and as such, following his remarks front end rates are higher and back end rates lower as a reaction. There were other Fed speakers, Goolsbee and Hammack, who both spoke yesterday and said little new. On the data footing, Non Farm Payrolls Annual Revision Prelim was -79k.

All G10 FX saw losses against the Greenback on the aforementioned Watsh speech, as opposed to any currency specific newsflow. As expected, there was plenty of central bank speak at Jackson Hole; BoE Governor Bailey remarked that they are seeing quite subdued second round effects so far and can watch this situation for now, and cannot promise that muted second round effects will continue. From the ECB Dolenc, Kazaks, and Kocher gave remarks, but little reaction was seen in the single-currency EUR. Elsewhere, while OATs saw some weakness at the open, EUR was steady in the wake of the French Presidential debate. Focus now shifts to Fitch’s rating on France this evening, seen unchanged, and the Socialist party, which is set to unveil demands for France’s 2027 budget over the weekend.