Euro: Focus on Fed signals and Jackson Hole – Deutsche Bank

Deutsche Bank strategists are closely monitoring EUR/USD trading at 1.165, anticipating Fed Chair Jerome Powell's speech at the Jackson Hole symposium. This event could alter expectations for the upcoming September Fed meeting, with a 35% probability of a rate hike still assigned by markets. Fed Chair Powell's speech at the Jackson Hole symposium is crucial, as it often marks significant announcements or policy signals.

Last year, former Chair Powell acknowledged a "shifting balance of risks," setting the stage for rate cuts to follow shortly. Prior to today's key event, market focus has been on the symposium where Fed Chair Powell will speak at 3pm London time. Some Fed speakers suggested more restrictive policy, with Cleveland Fed President Hammack voting for a hike last time.

Boston Fed President Collins maintains that rates are mildly restrictive, while Chicago Fed President Goolsbee wants evidence that the inflation shock is temporary. Main highlights for the day include Fed Chair Powell's speech at the Jackson Hole symposium, with additional remarks from Fed President Hammack and European Central Bank President Schnabel.

GBP/USD is currently consolidating after facing rejection at 1.3600 earlier in the week, as traders await the Nonfarm Payrolls benchmark revision and Powell's Jackson Hole speech.