US Dollar Index aims to recapture its 19-year high at 109.30 amid anxiety ahead of Jackson Hole

• The DXY is eyeing recapturing its 19-year high at 109.30 as investors turn risk-averse ahead of Jackson Hole.
• The Fed is expected to discuss the 50 bps rate hike this time.
• A downbeat US Durable Goods Orders data may halt the DXY’s rally.

The US dollar index (DXY) is on the verge of giving an upside break of the consolidation formed in a narrow range of 108.86-109.10. The DXY is aiming to recapture its fresh 19-year high at 109.29, which was earlier recorded last month. As anxiety over the commentary from Federal Reserve (Fed) chair Jerome Powell at Jackson Hole Economic Symposium is accelerating, investors are hiding behind the mighty DXY.

Guidance on policy rates at Jackson Hole

In the commentary from Fed chair Jerome Powell over the economic situation of the US, price pressures, and the consequences of liquidity shrinkage in the economy, investors will keenly focus on policy guidance. The investing community is aware of the evidence of exhaustion in the price pressures. Therefore, the Fed is expected to scale down its hawkish tone and will discuss a rate hike by half a percent in September.

Downside estimates for US Durable Goods Orders

As per the preliminary estimates, the US Durable Goods Orders data is expected to trim drastically to 0.5% from the prior release of 2%. The market participants are aware of the fact that the US core Consumer Price Index (CPI) remained steady at 5.9%. Despite that, a slump in the Durable Goods Orders indicates a decline in the overall demand. An occurrence of the same could bring significant offers for the DXY.

Key data this week: S&P Global Purchase Managers Index (PMI), New Home Sales, Durable Goods Orders, Pending Home Sales, Gross Domestic Product (GDP) (Preliminary), Initial Jobless Claims, and Core Personal Consumption Expenditure (PCE).

Major events this week: Jackson Hole Economic Symposium