Precise Investors Editorial Team
The U.S. dollar index was steady at 99.12 after paring gains from an eight-day high
The dollar traded in a narrow range on Thursday ahead of the Jackson Hole symposium, while the yen held steady after a Bank of Japan policymaker did not rule out a rate hike next month but stopped short of explicitly signalling one.
The U.S. dollar index was steady at 99.12 after paring gains from an eight-day high.
The U.S. Commerce Department data showed overnight that the Personal Consumption Expenditures Price Index rose 3.7% in the 12 months through July. On a month-on-month basis, the PCE increased 0.2% versus the estimate calling for a 0.1% rise after dropping 0.1% in June.
The reading on inflation kept the market’s expectation for a central bank rate hike by year-end alive, though central bank chairman Kevin Warsh’s speech at Jackson Hole will be the ultimate test, Westpac economist Ryan Wells said in a note. The event is due to begin later on Thursday.
The euro was up 0.07% against the U.S. dollar at $1.1657, while the British pound traded at $1.3592. The Australian dollar firmed 0.22% to $0.7183.
Meanwhile, the yen was largely steady at 159.29 per dollar, little moved after BOJ Deputy Governor Ryozo Himino said timely rate hikes would help avoid an inflation spike that could force abrupt tightening later.
Himino, however, stopped short of language similar to that used ahead of the BOJ’s January 2025 meeting to flag a rate hike.
Market participants had been looking for clues on the likelihood of a September rate hike and the scale and pace of further tightening, with money market broker Totan Tanshi pricing in an 86% chance of a BOJ hike next month.
He did express concern about upside risks to prices that has likely led markets to conclude that the remarks were not especially dovish, said Sho Suzuki, a market analyst at Matsui Securities. However, the absence of a clear signal means there is some chance the yen could come under renewed downward pressure.
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