FOREX-Dollar steady before Jackson Hole, yen little changed after BOJ's Himino speech

The U.S. 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 euro was up 0.07% against the U.S. dollar at $1.1657, while the British pound traded at $1.3592. The Australian dollar strengthened 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." Suzuki added that the lack of a signal does not necessarily mean ⁠expectations for a September rate hike will decline, noting appearances by board members leading up to the BOJ's upcoming September 17 and 18 meeting. The U.S. dollar index, which measures the ​greenback against a basket of currencies including the yen and the euro, 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 increased 3.7% in the 12 months through July, unchanged from June and slightly above the 3.6% estimate from economists polled by Reuters. ⁠On ​a month-on-month basis, the PCE rose 0.2% versus the estimate calling for a 0.1% increase after falling 0.1% in June. The reading on inflation kept the market's expectation for a Fed rate hike by year-end alive, though Federal Reserve 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 Korean won gained 0.48% against the dollar to 1,378.7 per dollar after the Bank ⁠of Korea raised its benchmark interest rate by ⁠25 basis points to 3.00%, a second straight increase. The Canadian dollar held steady versus the greenback at C$1.388 per dollar. U.S. President Donald Trump said on Wednesday it was "time to teach Canada you can't do this anymore," just days after trade ‌talks between the countries broke ‌down.

In cryptocurrencies, bitcoin gained 0.55% to $78,872.51. Ether jumped 1.22% to $2,502.15.