European shares edged higher and the U.S. dollar held firm near an 11-week peak against major peers on Friday as investors awaited remarks from the heads of the Federal Reserve and European Central Bank at a conference in Jackson Hole.
“The sentiment of higher for longer interest rates is probably going to be echoed by Powell and Lagarde. They will be erring on the side of caution, not saying hikes are gone and done and keeping that optionality on the table.” The pan European benchmark STOXX 600 index was last up 0.2% and on track for a 0.9% gain this week, which would snap a three-week run of declines.
The euro and sterling both fell to their lowest levels since mid-June at $1.0766 and $1.2560, respectively. “We do not expect the Bank of Japan to tighten monetary policy because the spike in inflation has not spilled over to a large acceleration in wage growth,” CBA strategist Joseph Capurso wrote in a client note.