USD/JPY Pair Halts Three-Day Winning Streak Amid Optimism Over US-Iran Peace Deal
The USD/JPY pair snapped its three-day winning streak on Thursday due to some selling pressure, but its downside potential appears limited. Spot prices currently trade above the 159.00 mark as market participants await Tokyo's inflation data and Fed Chair Kevin Warsh's speech on Friday.
The optimism over a potential US-Iran peace deal and the reopening of the Strait of Hormuz has put some pressure on the USD/JPY pair, exerting some resistance to its upward move. The US Commerce Department reported that the Personal Consumption Expenditures (PCE) Price Index rose 3.7% over the 12 months in July, unchanged from the previous month and slightly above consensus estimates.
This points to still sticky inflation and backs the case for the Fed's policy tightening. As a result, market participants will be closely scrutinizing Warsh's speech on Friday for more cues about the future policy path, which will play a key role in influencing the near-term USD price dynamics.