Dollar holds gains as investors await Warsh’s Jackson Hole debut

The US dollar managed to hold gains on Friday after the Treasury Department announced plans to boost purchases of longer-term bonds. The dollar index stood flat near a one-week peak against key currencies, with the euro and pound sterling slipping toward one-week lows against the greenback. The yen remained relatively stable at 159.34 per dollar.

The dollar index, which gauges the currency against six major peers, saw minimal movement at 99.13 in early Asian trade. Despite a week-long rise of 0.3%, the dollar continues its two-month decline, driven by Treasury Secretary Scott Bessent's announcement of increased bond buybacks, which could potentially weaken the currency. Investors are eagerly anticipating Federal Reserve Chair Kevin Warsh's debut speech at the Jackson Hole symposium, where he may shed light on his monetary policy stance and efforts to curb inflation.

However, the market's anticipation of a rate hike at the Fed's September meeting remains uncertain, with odds ranging from 35% to 75%. Despite elevated Treasury yields, Bitcoin experienced a slight gain of 0.5%, climbing to $80,620.33, on track for a 30% surge in August, its largest monthly gain since late 2024. Meanwhile, the Australian and New Zealand dollars saw modest gains, while the Canadian dollar held steady and was on track for a second month of decline due to escalating trade tensions with the US.

Additionally, Brent crude futures lingered near $90 a barrel after a Wall Street Journal report suggested President Trump rejected the possibility of reinstating the terms of the U.S.-Iran memorandum of understanding signed in June.