European FX Open - USD falls ahead of Jackson Hole

The USD opens broadly lower after Fed's Goolsbee stated last Friday that that some leading indicators of a recession are flashing warnings signs and that when the labor market starts to turn, it tends to worsen fast.

US housing starts for July also proved a disappointment, coming in at 1238k, way below the 1333k forecast, while the June figure was revised down to 1329k from 1353k.

Players now turn their focus to POWELL at Jackson Hole this week (Friday), and expectations for the Fed chair to provide clues on policy easing.

Ahead of the conference, GS reveal that they are "more confident" that the Fed will cut interest rates by 25bps at their September meeting, while CBA say the dollar is likely to ease this week, and expect Powell to "green light a cut" in September.

The FT meanwhile cites DALY, who stated that recent US economic data have given her "more confidence" that inflation is under control and that it’s time to consider adjusting benchmark borrowing costs, but the economy is "not in an urgent place."

USD/YEN has suffered a steep selloff as hedge funds also turn more bullish on the yen amid diverging interest rate outlooks from the Bank of Japan and the Federal Reserve, with lows of 145.52 hit so far to in turn take out 145.70 where a cluster of option strikes await this week.

Fast money accounts have also been spotted buying yen amid rising two-year JGB yields as players prepare for national CPI and BOJ Governor Ueda's appearance in front of parliament on Friday.

This session, data is sparse with just the US Jul Leading Index, Spain June Trade Balance, Swiss Weekly Domestic Sight Deposits CHF and Canada's Weekly Bloomberg Nanos Confidence.

Overnight, UK Aug Rightmove House Prices fell -1.5% m/m vs -0.4% prior.

Japan Jun Core Machine Orders rose 2.1% m/m vs the 0.9% consensus while NZ Jul Performance Services Index came in better at 44.6 vs a revised 40.7 last.

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