8/4/2021- 4:15 p.m.
The dollar did pick up a little strength on the back of better-than-expected economic data later in the week as well as safe-haven buying tied to a sell-off in global equity markets on Friday. With the Federal Reserve not scheduled to meet until September 21-22, Dollar/Yen traders will be left to interpret U.S. economic data for its potential impact on the Fed’s plans to begin tapering its bond stimulus purposes. Fed member comments will also have an impact on the price action as well as risk sentiment.
Investors feel the Fed will eventually begin tapering. That’s a given. They just want to know when and how. Without that information becoming available for at least seven weeks, look for choppy, two-sided price action.
The Dollar/Yen closed lower last week as dovish comments from the U.S. Federal Reserve and its Chairman Jerome Powell pushed Treasury yields and the U.S. Dollar lower, making the U.S. Dollar a less attractive asset.
