This is via ANZ, a preview of what to expect from the European Central Bank and the Federal Reserve (via Draghi's and Yellen's speeches)
In his speech at the Jackson Hole meeting this week, ECB President Draghi is expected to give further sign of ECB's growing confidence in the euro area economy. However, while the meeting is largely seen as a favourite spot for central banks to send signals, Draghi is unlikely to shift his policy language just yet. While Draghi may disappoint at Jackson Hole, the ECB is widely expected to make an announcement on the future of QE at its September's meeting - meaning that any dip in the euro should be seen as a buying opportunity.
Fed Chair Yellen is talking about financial stability and is likely to reinforce New York Fed President Dudley's message of earlier this week that a rate hike for later in the year remains on the table. Momentum in the US economy is picking up, with the economic surprise index starting to grind consistently higher, and sentiment towards the USD is already changing. Combining the current positioning with the Fed's conservative pricing, the USD may be due for a sharp rally.
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