Currencies

Dollar Options Signal Strength on Bets Powell Won’t Tilt Dovish

Chairman of the US Federal Reserve Jerome Powell during the Kansas City Federal Reserve's Jackson Hole Economic Policy Symposium in Moran, Wyoming, on Aug. 21. — Chairman of the US Federal Reserve Jerome Powell during the Kansas City Federal Reserve's Jackson Hole Economic Policy Symposium in Moran, Wyoming, on Aug. 21.
Photographer: David Paul Morris/Bloomberg

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By Naomi Tajitsu

August 22, 2025 at 8:15 AM EDT

Currency options pointed to the most bullish sentiment on the dollar in three weeks as traders bet Federal Reserve Chair Jerome Powell won’t take an overly dovish stance on interest-rate cuts.

So-called one-month risk reversals for the Bloomberg Dollar Spot Index jumped to their highest since July 31 before Powell’s hotly anticipated speech Friday at the US central bank’s annual Jackson Hole retreat. The US currency traded at its strongest level since Aug. 5, poised to end the week up 0.7%.