European session review: USD retreats as markets’ focus shifts to Fed’s Jackson Hole symposium

USD weakened against most of its major rivals in the European session on Monday, as risk appetite improved somewhat, but investors overall remained cautious, preparing for the Jackson Hole annual symposium of central bankers, which is set to start on August 26 and is expected to provide hints on future Federal Reserve’s policy.

The U.S. Dollar Index (DXY), measuring the U.S. currency's value relative to a basket of foreign currencies, dropped 0.26% to 93.26.

The symposium’s theme this year is "Macroeconomic Policy in an Uneven Economy” and it will be held virtually due to coronavirus risks. The Fed’s Chairman Jerome Powell is scheduled to address the event on Friday. Markets will be listening closely, hoping to get clues on when the еру U.S. central bank might look to begin tapering its asset purchases.

Besides the Fed Chair’s crucial statement, investors will also have to digest a raft of important economic reports this week, which could provide some light on the impact of the urging COVID-19 cases on U.S. growth. Among the major releases will be data on business activity in the manufacturing and services sectors (due later today), new home sales (due on Tuesday), durable goods (due on Wednesday), jobless claims, GDP (due on Thursday), personal income and spending and consumer sentiment (due on Friday).