The U.S. dollar rose in early European trade Friday, climbing to a two-month high as traders positioned for hawkish comments from Federal Reserve Chair Jerome Powell at Jackson Hole.

At 03:15 ET (07:15 GMT), the Dollar Index, which tracks the greenback against a basket of six other currencies, traded 0.2% higher at 104.107, just off the 104.25 level seen earlier Friday, the highest since June 7.

The index is up almost 1% this week, on course to rise for a sixth straight week.

Dollar higher ahead of Powell’s speech
The dollar pushed higher Thursday after data showed that the number of Americans filing new claims for unemployment benefits fell last week, adding to a series of economic releases that have helped ease worries of an impending U.S. recession.

Inflation, however, remains above the Fed’s target, and traders are wary that the Fed chief Jerome Powell will indicate that interest rates need to stay higher for longer to squash this threat during his speech at the Jackson Hole symposium later in the session.

The U.S. central bank has pushed short-term rates aggressively higher for well over a year to curb the worst inflation surge in decades, lifting its benchmark overnight interest rate to the 5.25%-5.50% range last month.

The Fed next meets in September, and while it is not expected to raise rates then the state of the economy has suggested the Fed may have to do more with monetary policy.

Euro slips as German economy stagnates
EUR/USD fell 0.2% to 1.0784 after the German economy stagnated in the second quarter compared to the previous three months, with data showing zero growth for the three months to July, falling 0.2% on an annual basis.

ECB President Christine Lagarde is also set to give a speech at Jackson Hole later Friday, and traders will be looking for more monetary clues ahead of the central bank’s next meeting in September.

Sterling weaker despite improved U.K. consumer sentiment
GBP/USD fell 0.2% to 1.2574, weighed by the stronger dollar, even after the GfK consumer sentiment indicator rose to -25 in August from a three-month low of -30 in July, its biggest rise since April, data showed earlier Friday, as lower inflation made Britons less downbeat about the outlook for their personal finances.

Elsewhere, USD/JPY rose 0.1% to 146.05, near a 10-month high, AUD/USD edged higher to 0.6421, but still close to nine-month lows, while USD/CNY rose 0.1% to 7.2873, steadying after a series of strong daily midpoint fixes from the People’s Bank of China.

USD/TRY rose 2.6% to 26.444, with the Turkish lira handing back some of the previous session’s hefty gains after the country’s central bank hiked its key interest rate by a larger-than-expected 750 basis points to 25%, signaling a new determination to address rebounding inflation as part of a broader policy U-turn.