The much anticipated Jackson Hole Symposium that began on Thursday last week ended without a bang. While investors were hopeful that the central bankers would address monetary policy, it was indeed the opposite. Both Yellen and Draghi failed to give any clues on monetary policy in what seems to be an obvious case of keeping the markets guessing.

Still, that did not stop investors from raising their bets on the euro. The U.S. dollar fell sharply by Friday’s close as the euro rallied to the highest levels since 2015. The EUR/USD posted strong gains, rising 1.1% to close Friday at $1.1928. This was the highest levels seen in the currency pair since January of 2015. Further gains are likely to come by.

Investors not quite disappointed from the Jackson Hole outcome

Janet Yellen’s speech

Although investors were disappointed, the market behavior showed that investors were optimistic that there are better times in store for the common currency. The euro is already one of the top performing currencies this year.

On Friday, Janet Yellen’s speech was scheduled ahead of Draghi’s. Ms. Yellen did not address anything significant as far as the US economy was concerned. Investors were slightly disappointed on the outcome of the speech by Yellen. Still, the US dollar was seen falling as a result.

The odds for another rate hike continue to slip. By market close on Friday, the probability for a rate hike fell to 42%. Furthermore, expectations are also rising that the short-term interest rates could remain at the current levels for some considerable future. This is likely to make the US dollar less attractive for yield-seeking investors.

Mario Draghi’s speech

Following Ms. Yellen’s speech, the baton was passed on to Draghi. The US dollar’s losses steepened further as investors began to front run in hopes that Draghi would sound more hawkish. Expectations that the ECB will wind down its stimulus program were quashed though. Although avoiding any specific references to monetary policy, Draghi acknowledged that the eurozone’s economy was recovering.