The U.S. dollar strengthened against major currencies on Tuesday as traders positioned for Federal Reserve Chair Jerome Powell’s speech at the annual Jackson Hole symposium on Friday, August 23. With no major U.S. economic data scheduled, the dollar index edged higher in early European trading as investors took a cautious view that the Federal Reserve may resist expectations for aggressive easing. Market pricing has shifted between a 25-basis-point cut and a 50-basis-point cut at the September meeting. A more cautious tone from Powell could support the dollar, while a clear signal of imminent cuts could prompt a sell-off. The euro and Japanese yen remain sensitive to U.S. interest-rate differentials, while the speech could also affect equities, bonds and emerging-market currencies. Traders are watching Powell’s comments on inflation, employment, the economic outlook and the September FOMC meeting, with position sizing and risk management becoming more important as volatility increases.