Forex Today: Markets to rock on Powell's speech as coronavirus news provide hope, hurricane eyed

Here is what you need to know on Thursday, August 27:

Currencies are experiencing the "calm before the storm" ahead of Fed Chair Powell's speech. He may introduce a looser longer-term framework that may weigh on the dollar. Hurricane Laura, coronavirus headlines and two 'US figures are eyed. 

Jerome Powell, Chairman of the Federal Reserve, will be speaking at the virtual Jackson Hole Symposium and may announce a paradigm shift in the Fed's thinking. Powell could announce Average Inflation Targeting (AIT) – allowing prices to rise more quickly to compensate for previous low inflation. That means lower rates and a weaker dollar.

See Powell’s Jackson Hole Symposium Preview: Inflation’s virtual reality

Gold has stabilized above $1,940 and would advance if Powell goes dovish. The precious metal bounced from the lows on Wednesday. 

US coronavirus hopes: The number of new coronavirus cases and deaths is declining in the world's largest economy. Abbott, a Chicago-based firm, announced a rapid 15-minute COVID-19 test that costs only $5. Moderna, a company based in Massachusets, said its vaccine candidate is proving efficient also among the elderly. 

Hurricane Laura – nearing Category 5 classification – is about to hit the shores of Texas and Louisiana with a storm surge described as "unsurvivable." Oil refineries and production facilities are mostly shut and oil prices are on the rise. WTI is above $43, the highest in five months. 

USD/CAD is trading below 1.32 amid rising oil prices and ahead of a speech by Tiff Macklem, Governor of the Bank of Canada, at Jackson Hole. 

Ahead of Powell, two significant releases are eyed. US initial jobless claims are set to decline toward one million after disappointing last week with a bump up. The second of second-quarter Gross Domestic Product is forecast to tick up from the depths of a crash of 32.9% annualized initially reported. 

See:

• US Initial Jobless Claims Preview: It is the trend that matters
• US GDP: Will the corona-quarter look better at second sight? Not necessarily

In US politics, President Donald Trump will deliver his acceptance speech at the Republican National Convention. The incumbent is narrowing the gap with rival Joe Biden. Protests against racial discrimination are in the headlines again, this time in Wisconsin. 

In Europe, Trade Commissioner Phil Hogan stepped down from his post after violating quarantine rules in his native Ireland. The prominent figure was involved in EU-US talks and also in Brexit. His departure may delay trade deals as the European Commission scrambles to replace him.

Cryptocurrencies are balanced with Bitcoin trading above $11,300 and Ethereum around $380.