Powell speech at Jackson Hole

After waiting the whole week for Jerome Powell's speech at Jackson Hole, the market got a whole 7-minute speech which only reiterated the Fed's mantra that its monetary policy will be data-driven going forward. We have seen markets struggling to digest the short speech by Fed Chair Powell, with the Rand trading quite wildly in a 10-cent range after the speech. The US dollar just about touched the 1.01 level against the Euro but has since fought back and is trading at 1.0040 against the Euro. 

Sideways into next week, for now

We believe that currencies could continue to trade sideways next week as the US non-farm payroll number will come into focus again on Friday. More emphasis will be placed on key US data now that the Fed has underlined its mantra of data being the key to its monetary policy. However, the current impasse could be disturbed should any new of recessions and inflation hit the market, where EM currencies could be under pressure.