On Friday the dollar traded near a one-week high as markets awaited Fed Chair Kevin Warsh’s speech at the Jackson Hole central bankers’ meeting. Traders have priced at least one 25bp Fed hike this year amid inflation remaining above the 2% target, supporting recent dollar strength; participants also want guidance on policy and Treasury steps to lower long-term funding costs after recent bond volatility. Commerzbank FX and commodities analyst Volkmar Baur notes Warsh has repeatedly defended the 2

On Friday the dollar traded near a one-week high as markets awaited Fed Chair Kevin Warsh’s speech at the Jackson Hole central bankers’ meeting. Traders have priced at least one 25bp Fed hike this year amid inflation remaining above the 2% target, supporting recent dollar strength; participants also want guidance on policy and Treasury steps to lower long-term funding costs after recent bond volatility. Commerzbank FX and commodities analyst Volkmar Baur notes Warsh has repeatedly defended the 2% goal without explicitly citing the PCE price index, and says the Fed may be considering alternative inflation measures; if Warsh signals that, markets could read it as dovish, reducing odds of further hikes and weighing on the dollar.