Yellen and Draghi did not talk about monetary policy. The US dollar fell against a number of world currencies, especially against risky assets, following the speeches on Friday at the symposium in Jackson-Hole.
The US dollar fell against a number of world currencies, especially against risky assets, after the speech of FRS representative, Janet Yellen. The Fed chair did not say anything about the economic prospects nor the further course of their monetary policy in her speech at the Jackson-Hole symposium on Friday.
From this, it was possible to conclude that the committee, apparently, decided to take a wait-and-see attitude and will look at how the economy will behave in the second half of this year, after several interest rate hikes.
Janet Yellen also stated that key regulatory reforms have not had a detrimental effect on the availability and growth of lending. However, she believes that any further changes in the financial regulation system should be more modest. Yellen also called for thinking about broader changes in the new regulatory system.
This suggests that many representatives of the Federal Reserve, including its chairman, are not inclined to further raise interest rates. This will continue to lead to the sale of the US dollar against risky currencies.
At the symposium, the Fed also talked about the availability of loans. According to the chairman of the Fed, buyers of housing with a non-ideal credit history may have less access to credit, while lending is widely available to small companies with a reliable credit history.
Data on orders for durable goods in the US also led to a decrease in the US dollar. It declined sharply in July this year, suggesting a tougher approach of Americans to their financial spending.
According to the US Department of Commerce, orders for durable goods in July 2017 decreased by 6.8% compared to the previous month. It amounted to 229.16 billion US dollars.
Additional support for the European currency was provided by ECB President Mario Draghi at the same symposium of the Fed.
At the very beginning, Draghi said that protectionism would create a serious risk for the potential growth of the world economy. He added that the WTO and the G20 are still vital to ensuring fair trade. It should be noted that a big topic for Europe now is the trade war, which was unleashed by the US President Donald Trump.
Draghi did not comment on monetary policy in his speech in Jackson Hole, saying only that differences in financial regulation would jeopardize financial openness and world trade.