The empty macroeconomic calendar pushed market players to take a wait-and-see position ahead of Fed Chairman Jerome Powell's speech at the annual Jackson Hole symposium. They also await the beginning of September.
Most likely, Powell will reiterate everything he said regarding the prospects of the Fed's monetary policy. He may also talk about the Fed's outlook on GDP dynamics, inflation, employment, and interest rate levels for the next three years.
Important economic reports also lie ahead, such as the overall investor sentiment for September. This will be influenced by the data on US inflation, unemployment and the Fed's monetary policy decisions. Before market participants make any significant decisions, they will want to understand the Fed's stance on interest rates, particularly on whether they will continue to increase or not, as well as the economic outlook for the US until the end of this year.
In terms of business activity, if the data in the services sector come out below 52.0 points, there may be further corrections in the stock markets and increased demand for dollar and Treasury yields. In this scenario, the dollar index may rise beyond 104.00 points by the end of August.
Forecasts for today:
EUR/USD
The pair fell below 1.0835 due to the weak business activity data in the manufacturing sectors of France and Germany. Economic issues in the eurozone may also lead to severe repercussions of recession against the backdrop of high inflation. If the pair drops further, it could decline to 1.0740.
USD/JPY
The pair trades above 145.00. If market sentiment worsens due to potentially weaker business activity data in the US service sector, there could be an increase in demand for yen and a drop of the pair below 145.00. In this case, it might fall to 144.25.