Forex Today: Fed gives it, Fed takes it away

Here is what you need to know on Friday, August 28:

US Federal Reserve chief Powell´s speech in the Jackson Hole Symposium triggered some wild volatility at the beginning of the American session, as he introduced a shift towards average target inflation, which means that policymakers could let inflation run beyond the usual 2%. Also, Powell focused on the employment situation. He highlighted a “broad-based and inclusive goal” of maximum employment. By the end of his statement, Powell noted that it would take a couple of years for the employment sector to recover, which alongside the new view on inflation, pretty much signifies lower rates for longer.

Major pairs saw wide intraday moves but ended the day within familiar levels. GBP/USD and AUD/USD reached fresh yearly highs before easing, although commodity-linked currencies retained most of their intraday gains ahead of the close.

The TikTok drama returned to the spotlight, after its CEO, Kevin Mayer, quit after three months in the job.  News are that the app is nearing an agreement to sell its operations in the US, Canada, Australia and New Zealand after US President Trump gave the company 90 days to divest from operating in the country.

Wall Street was also hit by Powell’s inducted volatility. The DJIA and the S&P traded in the green throughout the day with the first posting substantial gains. The Nasdaq, however, spent most of the day struggling a few points below its opening levels.

US Treasury yields edged higher after initially falling with Powell’s words. The yield on the benchmark 10-year note surged to a fresh weekly high of 0.75%, ending the day at 0.74%.

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