Dollar-Yen Rangebound Ahead of Jackson Hole Symposium

The dollar-yen pair remained in a tight range around the mid-159 level on the 27th, as markets awaited the start of the Jackson Hole Symposium. The pair stood at 159.41 yen as of 22:00, roughly 7 sen weaker for the dollar compared with 159.48 yen at 20:00. Chicago Fed President Austan Goolsbee expressed concern about inflation not being under control, citing tariff- and war-related price increases as challenges for the Federal Reserve.

The EUR/USD pair also traded sideways, standing at $1.1641 as of 22:00, roughly 0.0001 dollar firmer for the euro compared with $1.1640 at 20:00. The European Central Bank's minutes from its July 22-23 Governing Council meeting hinted that future rate hikes cannot be ruled out, leaving room for a resumption of tightening depending on inflation developments.

Market participants expect the environment of higher U.S. rates and a stronger dollar to persist given sticky U.S. inflation indicators. However, some note that concerns over currency intervention above the 160-yen level are making the upside heavy. With Fed Chair Warsh's speech scheduled for the 28th at Jackson Hole, expectations persist for a fiscal consolidation program from the U.S. Treasury.