Investing.com – The US dollar weakened slightly in early European trade on Wednesday, pulling away from a two-month high before receiving further signals on monetary policy from this week’s Jackson Hole conference.

At 3:05 AM ET (0705 GMT), the dollar index, which tracks the greenback against six other currencies, was trading 0.1% lower at 103.402 but still near a two-month high of 103.71 seen Tuesday.

h2 US yields fall from h2/highs

The dollar weakened this Wednesday as the yield on the 10-year government bond has retreated from Tuesday’s high of 4.366%, the highest in 16 years, to trade around 4.3%.

Yields have risen due to a number of factors, but the most important is the Fed’s expectation of an increase in interest rates amidst the resilience of the economy.

Further evidence of this may be seen in the release of the early August PMIs for US manufacturing and services, with the composite index expected to remain in expansionary territory.

However, the highlight of the week will be Federal Reserve Chair Jerome Powell’s speech at the Jackson Hole symposium tomorrow, Thursday, Aug. 24, where investors will be looking for clues as to whether Powell believes that further tightening will be necessary. inflation, or whether progress has been made enough to keep interest rates steady.

h2 UK PMI and Eurozone/h2

EUR/USD rose 0.1% to 1.0855 and GBP/USD rose 0.1% to 1.2748 ahead of the release of the early August PMIs for the UK and eurozone manufacturing and services as a whole.

Eurozone and UK PMIs have declined in recent months, due to stagnation in the service sector and contraction in manufacturing activity.

h2 Yen traders are looking for possible intervention/h2

USD/JPY fell 0.2% to 145.66, after Japanese PMI data showed some resistance in local manufacturing activity during August.

Even so, the currency pair remains close to a nine-month high of 146.565 seen last week as traders watched for signs of intervention when Japanese authorities started buying yen late last year when the dollar broke above ¥145.

Elsewhere, USD/CNY fell 0.1% to 7.2843, with the yuan supported by a much stronger-than-expected PBOC daily midpoint, and AUD/USD up 0.1% to 0.6428, following the release of the PMI data. Australia.