European session review: USD trades flat with Jackson Hole remaining the main focus

USD traded mixed and little changed against other major currencies in the European session on Wednesday as investors remained cautious ahead of the Federal Reserve’s crucial event later this week, which might provide hints on the U.S. central bank's future policy path. Meanwhile, optimism, which was bolstered by the reports about the FDA's full approval of the Pfizer/BioNTech COVID-19 vaccine, faded.

The U.S. currency slipped against NZD and AUD, appreciates marginally against EUR, JPY and  CAD, and was unchanged against GBP.

The U.S. Dollar Index (DXY), measuring the U.S. currency's value relative to a basket of foreign currencies, edged up 0.07% to 92.96.

The Fed’s Jackson Hole symposium is set to start on Thursday, August 26. It will be held virtually due to the coronavirus risks. The symposium’s theme this year is "Macroeconomic Policy in an Uneven Economy”.  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 Fed might look to begin tapering its asset purchases.

Earlier this month, several Fed’s officials have expressed their views that it would be appropriate for the U.S. central bank to start tapering in the fourth quarter, but some others have stressed that more evidence of a recovery is needed, particularly in the labour market, before such action is taken.