Daily Market Report
08/31/2026
EUR/USD ranged in the low to mid 1.16s overnight. On Friday, the US Dollar gained sharply after comments from Federal Reserve (Fed) Chair Kevin Warsh at the Jackson Hole Symposium where he warned of upside inflation risks.
Analysts note that Fed Chair Kevin Warsh “appeared to rebuild some of his credibility as an inflation fighter” in his first speech at the annual Jackson Hole Symposium, stressing that the central bank still has “work to do” to return inflation to its 2% target. They argue the tone marked “an important shift from the communication strategy he had followed since taking office,” with Warsh, for the first time as Chair, explicitly voicing dissatisfaction with recent inflation developments and signaling that he was open to further rate hikes unless underlying inflation began to improve convincingly.
Analysts judge that Warsh “delivered an important signal: the Fed is not relying on tighter financial conditions alone and remains willing to tighten further if underlying inflation stalls.” Against that backdrop, they suggest the next round of data – “especially the 4 September employment report and 11 September CPI” – could prove crucial for the FOMC’s swing voters as they weigh the case for additional tightening.
The British Pound (GBP) is marginally higher at around 1.3545 against the US Dollar (USD) during the European trading session on Monday. The GBP/USD pair rebounds as the US Dollar corrects after a strong upside move on Friday.
The Japanese Yen (JPY) pares some losses on Monday’s European session, as the US Dollar (USD) pulls back against its main peers, with the dust from the Jackson Hole meeting settling. The USD/JPY pair has pulled back to the 159.50 area at the time of writing, from Friday’s highs at 160.20, although the rising tensions in Iran and the uptick in Oil prices keep risk appetite subdued.
In Japan, preliminary figures revealed that Industrial Production edged up 0.1% in July, against expectations of a 0.6% contraction and following a 1.9% jump in June. At the same time, data released by the Japanese Ministry of Finance showed that Retail Trade rose 4% year-on-year in July, also beating expectations of a 3.0% increase.
Source: FX Street