How clear was the Fed Yellen’s speech at Jackson Hole for you? The following are Forex Broker interpretations of Jackson Hole Symposium.
29 August, AtoZForex – Markets had a hard time digesting Fed Chair Janet Yellen’s speech at Jackson Hole Symposium on Friday. Fortunately, Fed Stanley Fischer, Cleveland Fed Loretta Mester, and St. Louis Fed James Bullard comments following Jackson Hole Symposium were much clearer and markets reacted accordingly.
To get a better understanding of the Jackson Hole symposium's implications on the financial market, AtoZForex has asked four reliable Forex brokers to provide a short description of their opinion on Fed comments at the Jackson Hole Symposium this weekend. Below, you will find a list of Forex Broker interpretations of the Jackson Hole Symposium.
Xtrade interpretations of Jackson Hole Symposium
In response to our inquiry the Director of Communications and Public Relations at Xtrade, Kyley Picov stated that she believes that the Fed comments during the Jackson Hole Symposium weakened the Japanese yen and British pound:
“Fed Chairwoman Janet Yellen, a well-documented monetary dove, put markets on notice of the growing imminence of a rate hike — though it took vice-chairman Stanley Fischer’s seconding in a subsequent CNBC interview for the effect to be felt in a rising dollar and downward drifting stock indices.
Analysts noted that the British pound and Japanese yen appeared to be most vulnerable to any rise in US interest rates. And with half of all the S&P 500 gains since 2008 occurring on the day of Federal Open Market Committee decisions, equity markets are likely to drift, until at least the next FOMC meeting on 21 September.”
Magna Trust interpretations of Jackson Hole Symposium
The Vice President & Senior Fund Manager at Magna Trust, George Pavlopoulos believes that Janet Yellen’s speech indicated that there is a 18% chance of a rate hike:
“Our company/strategy research considers that - in total contradiction to what major Bank brokerages/Houses state, predicting just an 18% probability of a potential rate interest increase - we think that there is at least a double probability of a rate hike.
Therefore, taken for granted that the probability is not at all a trivial one, but significantly higher than estimated, we like buying USD in dips, especially versus JPY, therefore we suggest buying on dips (long) USD/JPY.”
Orbex interpretations of Jackson Hole Symposium
An analyst of Orbex, John Benjamin, has commented that the market should pay close attention to USDJPY after the Jackson Hole Symposium. He believes that:
"The financial instruments worth watching are obviously stocks, bonds, and gold. For forex traders, it is worth paying attention to how stock indices and gold markets will react to Yellen's speech. Let's not forget the obvious currency pair, EURUSD, and USDJPY which will be under pressure. I'm particularly interested in how USDJPY will emerge out of this event as this currency has been trading in a tight range for a week now."
Fidelis Capital Markets interpretations of Jackson Hole Symposium
Lastly, AtoZForex reached out to Fidelis Capital Markets, inquiring for their opinion on the Jackson Hole Symposium. In response, Adamos Anastasiou, the head of Brokerage at Fidelis Capital Markets highlighted the possibility of Janet Yellen’s speech impact on USDJPY, saying:
“The Forex market has been eagerly anticipating Janet’s speech to get further clues on Fed rate path. Speculation among market participants has been built towards hawkish comments as other members of the FOMC were commending for a rate hike possibility until the end of 2016. Nevertheless, expectations were not reflected on charts as the US Dollar index was trading in a tight range.
We should expect trading activity to increase during the speech and major currency pairs’ volatility would increase. More specifically, USDJPY could bounce up in case Janet speaks for a rate hike in September and in addition, a rate hike would indicate that US economy would be considered to be at the better state and that is likely to lift risk sentiment adding further weight on Japanese Yen. Therefore, I would expect the USDJPY to receive the largest reaction from Janet Yellen speech.”
Apparently, a large number of Asian share markets collapsed on Monday, as the US dollar firmed after the Fed Chairwoman Janet Yellen mentioned the possibility of the US rate hike on Jackson Hole Symposium this weekend.
The European markets also have started the trading at a weak point, while the financial spread was improving in anticipation of German DAX opening at 0.7 percent lower. The blue-chip Euro Stoxx 50 was expected to open at 0.6 percent lower with British markets being closed on a holiday. Yellen’s comments regarding the rate hike at Jackson Hole influenced Asian stocks in a broad way. Japan’s Nikkei opposed the tendency, closing 2.3 percent higher, where the Yen weakened against the dollar. Shanghai Composite and China’s CSI 300 Index went down 0.2 percent, with Hong Kong’s Hang Seng going down 0.4 percent.
See also: Will BoJ ease further as confirmed by Kuroda at Jackson Hole?
What are your expectations regarding the Forex market tendencies? What do you think is going to happen to USDJPY? Share your opinion in the comments section below.