Dollar Within Range of Cycle Lows as New Fed Framework Filters Through

Markets are still clearly feeling the after-effects of Powell's Jackson Hole appearance, with the greenback the weakest in G10 early Friday. After an initial mixed response to Powell's speech, the USD index is now within striking distance of cycle lows printed mid-August, This has helped give most major pairs another leg higher, resulting in new cycle highs for the likes of AUD and CAD vs. the USD.

Headlines this morning have focused on the resignation of the Japanese PM Abe. His health complications had been known this week, however his resignation today was slightly unexpected and ahead of schedule. Markets responded by buying JPY on uncertainty over his flagship Abenomics policies, but normal service is expected to resume with his successor likely to continue the well-received policy and BoJ policy expected to remain supportive.

Focus Friday turns to month-end flows that may come a little early due to the UK bank holiday on Monday. Canadian GDP, personal income/spending and MNI Chicago Business Barometer figures are the data highlights Friday. BoE's Bailey is the headline speaker from the ongoing Jackson Hole policy conference.