Dollar Steady Ahead of Jackson Hole as Yen Holds Firm

The U.S. dollar traded in a tight range on Thursday as investors awaited Federal Reserve Chairman Kevin Warsh’s Jackson Hole speech for fresh signals on the interest rate outlook, while the Japanese yen remained stable following comments from a Bank of Japan official.

The U.S. Dollar Index, which tracks the greenback against a basket of major currencies, was little changed at 99.12 after retreating from an eight-day high. The euro edged 0.07% higher to $1.1657, while the British pound traded at $1.3592. The Australian dollar gained 0.22% to $0.7183.

The yen hovered around 159.29 per dollar after BOJ Deputy Governor Ryozo Himino said timely interest rate increases could prevent inflation from accelerating and requiring more aggressive tightening later. However, Himino stopped short of clearly signaling a September rate hike.

Markets are currently pricing an 86% probability that the BOJ will raise rates next month, according to money market broker Totan Tanshi. Investors will closely monitor further comments from policymakers before the central bank’s September 17-18 meeting.

Meanwhile, U.S. inflation data reinforced expectations that the Federal Reserve could raise rates before the end of 2026. The Personal Consumption Expenditures Price Index increased 3.7% year over year in July, unchanged from June but slightly above the 3.6% forecast. Monthly PCE inflation rose 0.2%, exceeding expectations for a 0.1% increase.

Attention now turns to Warsh’s remarks at the Jackson Hole symposium, which begins Thursday and could provide clearer guidance on the Fed’s next policy steps.

Elsewhere, the Korean won strengthened 0.48% to 1,378.7 per dollar after the Bank of Korea raised its benchmark rate by 25 basis points to 3.00%, marking its second consecutive increase.

The Canadian dollar was steady at C$1.388 amid renewed U.S.-Canada trade tensions.

Cryptocurrencies advanced, with Bitcoin gaining 0.55% to $78,872.51 and Ether rising 1.22% to $2,502.15.