By Olga Cotaga
LONDON, Aug 27 (Reuters) – The US dollar was hovering near a week-long low it hit earlier on Thursday, ahead of a speech by the Federal Reserve chairman, which is expected to signal that the central bank will change its trading framework. policies around the inflation target.
* Jerome Powell will speak at 1310 GMT at the Jackson Hole annual central bank conference and investors will be watching for his outlook on the inflation target and the trajectory of interest rates.
* The changes are likely to imply that the Fed will base its future monetary policy on actual rather than projected inflation data, meaning that the Fed will leave interest rates at their current lows for longer than in past crises, which in turn it would weaken the dollar.
* If Powell does not meet these expectations “there is a possibility of a correction” in the euro / dollar, which rose to $ 1.1966 last week after the minutes of the July meeting of the Fed revealed its doubts about the introduction of yield curve control, said Ester Reichelt, an analyst at Commerzbank.
* The euro was trading at $ 1.1807, down 0.2% on the day, after rising to a six-day high of $ 1.1850.
* The dollar index, which measures the greenback against six major currencies, was up 0.2% to 93.04, still near its weakest level this week and not far from the two-year low of 92.12 that played last week.
* The dollar held steady against the Japanese yen at 106.04 ahead of a press conference on Friday by Japanese Prime Minister Shinzo Abe, which will take place amid mounting speculation about his health
(Report by Olga Cotaga. Edited in Spanish by Javier Leira)