The U.S. dollar held modest gains on Thursday, stabilizing near 99.15 on the dollar index, as investors positioned ahead of Federal Reserve Chair Kevin Warsh’s speech at the annual Jackson Hole economic symposium.
The greenback’s advance follows a nearly 1% decline last week, which was driven in part by a rotation into hard assets amid inflation concerns and elevated oil prices. The core Personal Consumption Expenditures price index rose 0.2% month-over-month and 3.3% year-over-year in July, matching expectations but remaining well above the Fed’s 2% target. U.S. real GDP growth for the second quarter was confirmed at 1.5%, while the national debt surpassed $40 trillion.
The South Korean won strengthened 0.3% to 1,381.45 per dollar after the Bank of Korea raised its benchmark rate by 25 basis points to 3.00%, citing improved growth prospects. The central bank also upgraded its 2026 GDP forecast to 3.3% from 2.6% and indicated that year-end rates could reach 3.25%.
Elsewhere, the Canadian dollar slipped 0.1% against the dollar. The euro traded just below flat at $1.1650, near a one-week low.
Macquarie strategist Thierry Wizman said Warsh’s Jackson Hole address is more likely to strike a hawkish tone, aligning with recent hawkish signals from other central banks and persistent inflation pressures. He added that a balanced speech addressing structural challenges such as geopolitical risks and demographic trends would restore credibility to the Fed, potentially supporting the dollar and flattening the yield curve.
Market sentiment has also been influenced by a recent sell-off in U.S. Treasuries and a broader rotation out of fiat currencies into assets like gold and cryptocurrency, fueled by inflation jitters and heavy debt issuance by major firms funding AI infrastructure.
