FX.co ★ Waiting for speeches

Today, the annual symposium in Jackson Hole ends, and all the sweetest things will happen in the evening.

First, the head of the Federal Reserve, Janet Yellen. Her speech is scheduled for 2:00 pm London Time. It is extremely unlikely that she will say anything comprehensible about the timing of the next increase in the interest rate. Inflation in the US continues to slow, and the labor market seems to have finally stabilized. Amid conditions of slowing inflation, raising the rate is rather risky, so the head of the Fed will only once again assure everyone that the central bank will continue to follow the plan to tighten monetary policy, while closely monitoring the macroeconomic dynamics. This means that if the Fed raises the rate again before the end of the year, then at best it will be in December.

But the most interesting event will happen in the evening, when Mario Draghi will perform. The speech of the head of the ECB is scheduled for 7:00 pm London Time. Apparently, this was intentional, so that his statements did not cause panic in the markets. Markets are waiting for words about the beginning of a gradual tightening of the ECB's monetary policy, particularly, about plans to reduce or even stop the quantitative easing program. Even though rumors that such a thing is possible surfaced at end of spring, it became enough to launch a long process of strengthening the single European currency. Now, inflation in Europe has relatively stabilized, and unemployment is gradually declining. These are ideal conditions for the planned tightening of the ECB policy. And even if there are no direct indications in the speech of Mario Draghi, the subsequent questions will obviously touch upon this topic.

It is the most likely that the appearance of Mario Draghi will provoke the further growth of the single European currency. However, due to the late time of the speeches, we will see the market reaction only on Monday, when the euro surges to the level of 1,900.