Dollar Gains Momentum Ahead of Fed's Jackson Hole Symposium

The dollar strengthened on Wednesday with traders focused on the Federal Reserve's upcoming Jackson Hole symposium. Fed Chair Jerome Powell's speech is anticipated for clues on rate policy direction. Markets largely foresee a rate cut next month, reflecting in the dollar index's rise to a two-week high.

The dollar rallied on Wednesday, marking its third consecutive day of gains, as attention turned to the Federal Reserve's Jackson Hole symposium later this week. Investors are keenly observing Fed Chair Jerome Powell's upcoming speech for hints on future monetary policy direction.

Market participants are pricing in an 84% probability of a rate cut next month following recent weak payroll data, with expectations of 54 basis points of reductions by year-end. The dollar index climbed to 98.393, its highest point since mid-August, bolstered by hawkish sentiments.

In related movements, the New Zealand and Australian dollars faced declines, with the RBNZ likely moving towards a rate cut. Meanwhile, the Fed's stance seems influenced by a robust producer price reading, though tariff-related pressures remain on the horizon.

(With inputs from agencies.)