Forex Today: US Dollar climbs higher ahead of Fed Chair Powell's speech at Jackson Hole

Here is what you need to know on Friday, August 25:

The US Dollar gathered strength against its rivals in the second half of the day on Thursday and the US Dollar Index (DXY) registered its highest daily close since early June. The USD preserves its strength early Friday as market participants eagerly await Fed Chairman Jerome Powell's speech at the Jackson Hole Symposium later in the day. The European economic docket will feature IFO sentiment survey and European Central Bank (ECB) President Christine Lagarde will speak in the late American session.

Although the USD struggled to outperform its rivals following some dovish comments from Fed officials early Thursday, the negative shift seen in risk sentiment provided a boost to the currency. Boston Federal Reserve President Susan Collins and Philadelphia Fed President Patrick Harker both said that they may have reached a point where they could hold rates steady. Following Wednesday's impressive upsurge, the Nasdaq Composite Index lost more than 2% on Thursday and the S&P 500 Index declined nearly 1.5%. Early Friday, US stock index futures trade mixed, while DXY clings to modest gains above 104.00. 

After recovering above 1.0850 during the European trading hours on Thursday, EUR/USD reversed its direction and closed the day deep in negative territory. The pair continued to push lower early Friday and was last seen losing 0.2% on the day at around 1.0780. Earlier in the day, the data from Germany showed that the real Gross Domestic Product contracted 0.2% on a yearly basis in the second quarter, matching the previous estimate and the market expectation.

GBP/USD lost more than 100 pips on Thursday and broke below 1.2600. The pair stays on the back foot and trades at its weakest level in over two months near 1.2570 in the European morning.

USD/JPY recovered above 145.00 late Thursday and extended its rally beyond 146.00 early Friday. The Annual Tokyo Consumer Price Index in August rose 2.9%, down from 3.2% recorded in July and slightly below the market expectation of 3%. Bank of Governor Kazuo Ueda will speak at the Jackson Hole Symposium on Saturday.

Despite the broad-based USD strength, Gold price recorded gains for the fourth straight day on Thursday as US Treasury bond yields edged lower on dovish Fed commentary. XAU/USD stays relatively quiet and trades in a tight channel above $1,910 early Friday.

Bitcoin failed to build on Wednesday's gains and closed in the red on Thursday. At the time of press, BTC/USD was moving sideways near $26,000. Ethereum fell more than 1% on Thursday and was last seen trading in negative territory slightly below $1,650.