(Reuters) The dollar declined on Tuesday, in line with the drop in Treasury yields, as investors braced for a potentially dovish Federal Reserve at a Jackson Hole, Wyoming, gathering later this week, with many expecting an announcement of some measure that would ease U.S. recession concerns.
Risk aversion crept into the market a day after investors cheered the prospect of new stimulus measures from global central banks to shore up their struggling economies.
Markets also cautiously awaited Fed Chairman Jerome Powell’s speech on Friday in Jackson Hole.
“There are a lot of recession signs and the expectation is that Chairman Powell will address them and probably say we are looking to cut,” said Juan Perez, senior FX trader and analyst at Tempus Inc in Washington.
“What the market is trying to digest is that there are serious signs that have been here with a precedent prior to a recession. Of course, the inverted curve is a major one. Ultimately, safe havens are going to keep going up,” he added.