Palladium prices rose on Friday amid a weaker US dollar against most major currencies as markets followed Federal Reserve Chair Jerome Powell’s speech at Jackson Hole.

Powell hinted during his remarks at the symposium on Friday that an interest rate cut could be possible in the coming period, but emphasized that elevated uncertainty makes the task of policymakers more complicated.

He confirmed that the labor market remains strong and the economy has shown resilience, but noted that risks have increased recently. He explained that tariffs could push inflation higher again, which the Fed is seeking to avoid.

Powell pointed out that the benchmark interest rate is now about 1% lower than a year ago, and that low unemployment gives the Fed room to move cautiously in adjusting monetary policy. He added that baseline expectations and a shift in the balance of risks may indeed warrant a review of the current stance.

He said the Federal Open Market Committee’s decisions will remain “solely data-dependent,” reaffirming the central bank’s commitment to achieving 2% inflation to maintain long-term stability in expectations.

In his assessment of the economy, Powell noted that job growth has slowed alongside weaker consumer spending, highlighting that labor supply and demand are in an “unusual” balance. He also stressed that monetary policy will undergo periodic reviews every five years to adapt to structural changes in the economy.

Meanwhile, the dollar index fell 0.9% to 97.7 points by 15:53 GMT, after reaching as high as 98.8 and as low as 97.7.

In trading, palladium futures for September delivery rose 2.8% to $1,147.5 an ounce by 15:53 GMT.

Bitcoin fell on Friday, extending the sharp declines recorded earlier this week, as risk appetite weakened amid growing doubts about a US rate cut ahead of the highly anticipated speech by Federal Reserve Chair Jerome Powell.

The world’s largest cryptocurrency posted weekly losses of nearly 4%, weighed down by a wave of profit-taking after hitting record levels in early August. Other digital currencies also retreated broadly on Friday, heading for weekly losses as well.

Markets did not react to a report stating that China is considering developing yuan-backed stablecoins to promote domestic currency trading, despite Beijing having banned all crypto trading activities in 2021.

Bitcoin dropped by 0.9% to $112,200 as of 12:43 GMT on CoinMarketCap.

Bitcoin Declines Amid Weakening Rate-Cut Bets and Powell Anticipation

The latest Bitcoin losses came against the backdrop of a broader deterioration in risk sentiment, as markets gradually reduced expectations for a September rate cut.

Federal funds futures pricing showed that markets currently assign a 73.1% chance of a 25-basis-point cut in September, down from more than 90% last week, according to CME’s FedWatch tool.

Minutes from the late-July Fed meeting, released this week, revealed that most members supported keeping rates unchanged in the near term.

Powell, set to speak at Jackson Hole on Friday, has remained cautious about any potential cuts, pointing to the inflationary uncertainty triggered by President Donald Trump’s tariffs.

Signs of resilience in the US economy, such as stronger-than-expected August PMI data, also contributed to reduced rate-cut expectations.

Higher-for-longer interest rates are considered negative for highly speculative assets like cryptocurrencies, as they drain liquidity and discourage risk-taking. Bitcoin suffered heavy losses during the Fed’s tightening cycles in 2022 and 2023, before staging a strong rally when monetary easing began in 2024.

Altcoins fell in tandem with Bitcoin, with most heading for weekly losses amid continued profit-taking from their August peaks.

Despite the current correction, Bitcoin remains in a strong uptrend this year, approaching historical highs. Some market watchers believe the bull cycle has not yet peaked and may still drive the asset to fresh record levels.

In a recent report, Tuur Demeester and Adamant Research said Bitcoin is showing signs of mid-cycle strength, projecting it could climb to $500,000 or higher in the coming phase.

According to the report, price scenarios range from a conservative outlook of a fourfold rise from current levels, to a bullish case of a tenfold increase, implying a value of about $1.2 million per coin.

“We believe we are in the middle of a cycle that could turn into one of Bitcoin’s most significant bull runs in history,” the report stated. “From current levels, there is still potential for a 4–10x rise, pointing to prices above $500,000.”

Bitcoin Remains Risky, But Still the Top Choice Among Cryptocurrencies

The report acknowledged that the path toward six-figure levels is not without risks. Exchange hacks or large-scale sales of confiscated coins, which have caused bankruptcies in the past, could exert temporary price pressures.

It also highlighted concentration risks, noting that Coinbase holds about 10% of circulating supply. However, it pointed out that ETFs like CoinShares are diversifying custody channels.

The report cited multiple supportive factors for Bitcoin, including “accelerating institutional adoption, deepening fiscal deficits, and growing government involvement – such as the US creating a national strategic Bitcoin reserve and increasing ETF holdings, which now account for about 1.4 million coins.”

It concluded by advising investors to focus on Bitcoin rather than chasing speculative altcoins with little real-world use, stating: “Allocating 5% of a portfolio to Bitcoin serves as insurance against systemic risks, while higher allocations reflect greater conviction.”

Oil prices held nearly steady on Friday, as hopes for an imminent peace deal between Russia and Ukraine faded, putting prices on track for their first weekly gain in three weeks.

Brent crude futures slipped 17 cents, or 0.25%, to $67.50 a barrel by 1000 GMT. US West Texas Intermediate (WTI) crude fell 13 cents, or 0.2%, to $63.39.

Both contracts had gained more than 1% in the previous session. Brent has risen 2.8% so far this week, while WTI is up 1%.

Giovanni Staunovo, commodity analyst at UBS, said: “Everyone is waiting for the next move from President Trump. In the coming days, it seems nothing will happen.”

The war, now in its third and a half year, showed no let-up this week. Russia launched an airstrike near Ukraine’s border with the European Union on Thursday, while Ukraine said it struck a Russian oil refinery and pumping station in Unecha, a vital part of the Druzhba pipeline that carries Russian oil to Europe. Hungary said supplies through the line had stopped.

Trump is seeking to arrange a summit between Russian President Vladimir Putin and Ukrainian President Volodymyr Zelensky as part of his mediation efforts to reach a peace deal.

But arranging such a meeting appears difficult, while discussions over possible security guarantees are facing obstacles, analysts at ING wrote in a client note on Friday. They added: “The lower the chances of a ceasefire, the higher the risk of tougher US sanctions on Russia.”

Meanwhile, American and European planners presented military options to their national security advisers following the first direct meeting between US and Russian leaders since the invasion of Ukraine.

Putin has demanded that Ukraine abandon the entire eastern Donbas region, renounce ambitions to join NATO, and keep Western forces out of the country, according to sources who spoke to Reuters.

Trump has pledged to protect Ukraine under any deal to end the war, while Zelensky rejected any withdrawal from internationally recognized Ukrainian territory.

Larger-than-expected decline in US oil inventories

Oil prices also drew support from a bigger-than-expected drop in US crude stockpiles last week, signaling firm demand. Inventories fell by 6 million barrels in the week ending August 15, the US Energy Information Administration said on Wednesday, compared with analysts’ forecasts for a draw of just 1.8 million barrels.

This was partly offset by weak German economic data, which showed the eurozone’s largest economy shrank by 0.3% in the second quarter, raising concerns about oil demand.

Investors were also watching the Jackson Hole Economic Symposium in Wyoming for signals on a potential US interest rate cut next month. The annual gathering of top central bankers began on Thursday, with Fed Chair Jerome Powell scheduled to deliver his speech on Friday.

A rate cut could stimulate economic growth and boost oil demand, potentially supporting prices.

The US dollar hovered near a two-week high against the euro and the British pound on Friday, as investors scaled back bets on an interest rate cut ahead of Federal Reserve Chair Jerome Powell’s speech at the Jackson Hole symposium.

The euro and the British pound recorded their weakest levels since early August, retreating by 0.1% to $1.1597 and $1.3408 respectively.

Earlier signs of weakness in the US labor market had boosted hopes for lower borrowing costs next month, but those expectations receded following stronger-than-expected economic data and cautious comments from Federal Reserve officials.

According to CME’s FedWatch tool, traders are currently pricing in a 73% probability of a 25-basis-point rate cut in September, down from 85.4% a week earlier.

Jane Foley, head of FX strategy at Rabobank, said: “The dollar is reflecting the risk that Powell sticks to his cautious stance and turns more hawkish.”

The dollar index, which measures the US currency against six major peers, rose 0.1% to 98.71, on track for a weekly gain of 0.9%, ending a two-week losing streak.

Federal Reserve officials appeared hesitant on Thursday regarding a rate cut next month, setting the stage for Powell’s speech scheduled at 10 a.m. Eastern (1400 GMT) during the annual conference in Jackson Hole, Wyoming, which began on Thursday.

Austan Goolsbee, president of the Chicago Fed, said the upcoming meeting was “open” and could bring a policy change, but he pointed to mixed economic data and unexpectedly high inflation readings that made him cautious about an imminent cut.

Charu Chanana, head of investment strategy at Saxo, added: “With inflation and jobs data still due before the September meeting, Powell has every reason to be patient and maintain flexibility.”

Analysts at Bank of America Global Research said the dollar has limited upside in the near term ahead of Jackson Hole, but maintained a bearish longer-term view given growing stagflation risks in the US economy. They noted: “The stagflationary environment, tariffs, and concerns over Fed independence and US institutions are all factors likely to drive the dollar lower eventually,” raising their year-end forecast for the euro to $1.20 from $1.17 previously.

The euro has gained 12% so far in 2025, supported by dollar weakness.

Elsewhere, the yen slipped to 148.56 per dollar, heading for a weekly loss of 0.9%. Data showed Japan’s core inflation slowed for the second consecutive month in July but remained above the central bank’s 2% target, keeping expectations of a rate hike alive in the coming months.

Japanese government bond yields tracked US Treasuries higher, with the 30-year yield hitting a fresh record high on Friday. The US 30-year Treasury yield stood at 4.9285% after a two-basis-point rise on Thursday, while the two-year yield, more sensitive to rate expectations, held at 3.79% after climbing 5 basis points in the previous session.

The Swedish krona and Norwegian crown slipped 0.2% against the dollar, while the Swiss franc held steady at 0.8093.