Powell's speech provoked the growth of the dollar

On Monday, the US dollar reached a 20-year high against major currency competitors after the speech of the head of the US Federal Reserve Jerome Powell at a symposium in Jackson Hole on Friday. The dollar index peaked at 109.48 points today.

In particular, Asian currencies fell: the Chinese yuan reached a new 2-year low of $6,9321, and the Japanese yen fell to 138.88 against the dollar. The Australian dollar fell to $0.6858, and the New Zealand dollar fell to $0.6109. Paired with the European currency, the dollar rose to $0.9944.

The head of the US regulator said that the Fed does not plan to make «dovish» changes to its rhetoric and intends to further raise the base rate to combat rampant inflation. Powell also warned that the growth of the US economy could be undermined by a rate hike, as households and businesses will inevitably face a number of problems before consumer price growth can be contained.

After the politician's speech, an increasing number of analysts began to predict a rate hike at the September meeting by 75 basis points. The rate is expected to exceed 3% by the end of the year.

Now all the attention of the markets is focused on Friday's report on employment in the United States (Non-Farm Payrolls). A strong report on the labor market may give the Fed additional opportunities to maintain the current pace of monetary policy tightening.