In the foreign exchange market for the week that ended on August 17th, the dollar weakened against the yen, pushing the USDJPY down from the mid-148 yen range to the lower 146 yen range. Weaker-than-expected U.S. CPI figures led to increased speculation about a Federal Reserve Board (FRB) rate cut. Additionally, U.S. Treasury Secretary Scott Bessent urged the FRB to make a rate cut and the Bank of Japan (BOJ) to make a rate hike.

As the dollar weakened, the EURUSD moved steadily. Also, the improvement of the U.K. GDP pushed the GBPUSD higher.

August 11 (Mon)

The USDJPY started the weekly trading session by rising from the lower 147 yen range to the lower 148 yen range. However, it then lacked direction. Amid the strong dollar, the market was waiting for the U.S. CPI announcement on August 12th.

The EURUSD temporarily fell below 1.16, and the GBPUSD temporarily dropped below 1.34. However, both later rebounded.

August 12 (Tue)

The U.S. CPI rose 2.7% over the last 12 months, missing the market's expectation of 2.8%. This announcement fueled market speculation that the FRB will lower interest rates in September. The USDJPY fell from the 148.5 yen range to the 147.5 yen range.

Meanwhile, the EURUSD rose to touch the 1.169 range, and the GBPUSD climbed to touch the 1.352 range.

August 13 (Wed)

U.S. Treasury Secretary Scott Bessent urged the FRB to make a significant rate cut and the BOJ to make a rate hike. His comments strengthened the momentum of the strong yen, as the USDJPY fell to the 147.0 yen range.

Meanwhile, the EURUSD extended its rally to the 1.173 range, and the GBPUSD rose to the 1.358 range.

August 14 (Thu)

The stronger-than-expected U.S. Producer Price Index (PPI) for July cooled down excessive speculation about an upcoming U.S. rate cut. Consequently, the dollar was bought back, and the USDJPY jumped from the 146.2 yen range to the upper 147 yen range.

Meanwhile, the EURUSD fell to the 1.163 range, and the GBPUSD dropped to the 1.352 range.

August 15 (Fri)

The first preliminary figures of Japanese quarterly GDP between April and June beat predictions, fueling market speculation that the BOJ may make a rate hike by the end of this year. Consequently, the yen strengthened, and the USDJPY fell from the upper 147 yen range to the upper 146 yen range during the daily trading session.

As the dollar weakened, the EURUSD fluctuated steadily and recovered the 1.17 range. The GBPUSD also moved steadily, reaching the mid-1.35 range to close the weekly trading session.

August 20 (Wed)

• 09:00 Europe: July Harmonised Index of Consumer Prices (preliminary HICP)
• 09:00 Europe: July Harmonised Index of Consumer Prices (preliminary HICP core index)
• 18:00 U.S.: Federal Reserve Open Market Committee (FOMC) meeting minutes

August 21 (Thu)

• 23:30 Japan: July Consumer Price Index (CPI, all items, year-on-year data)
• 23:30 Japan: July Consumer Price Index (CPI, all items less fresh food)
• 23:30 Japan: July Consumer Price Index (CPI, all items less fresh food and energy)

August 22 (Fri)

• 14:00 U.S.: Speech by Federal Reserve Board (FRB) Chair Jerome H. Powell

The following currency pair charts are analyzed using an overlay of the ±1σ and ±2σ standard deviation Bollinger Bands, with a 20-period moving average.

As uncertainty over the U.S. economy intensifies, the market will focus on the minutes from the latest FOMC meeting and the Jackson Hole Economic Policy Symposium to determine the FRB's monetary policy. Pressures from the political arena and reports about the FOMC member selection could lead to dollar selling. In Japan, meanwhile, the Liberal Democratic Party (LDP) is expected to move up the leadership election, which could trigger a sell-off of the yen.

Next is an analysis of the USDJPY daily chart.

The pair lacks direction as it has been fluctuating between the middle line and -1σ. It will be better to wait and see whether the pair breaks above 149.18 yen or falls below 145.85 yen before deciding to keep up with the trend.

We continue with an analysis of the USDJPY weekly chart.

The weekly chart shows that the pair has been fluctuating around +1σ for several weeks. If the pair falls below 145.45 yen, which is equivalent to the current middle line level, it may drop as low as 142 yen.

The market is dominated by speculation about U.S. monetary policy, with more investors predicting a rate cut in the near future. As U.S. President Donald Trump insists on the dismissal of FRB Chair Jerome Powell, the market will closely watch Powell's speech in Jackson Hole on August 22nd.

Next is an analysis of the EURUSD daily chart.

The pair has continued to rally since it hit bottom at 1.1391. Unless it breaks below this level, it is safe to say that the uptrend will likely continue.

We continue with an analysis of the EURUSD weekly chart.

On a weekly basis, the pair maintains a strong uptrend. Although some selling pressure is preventing the pair from attempting to reach the annual high, it is safe to say that the current uptrend will likely continue.

The U.K. CPI figures will be announced on August 20th. If the figures miss the prediction, the market will ramp up speculation about a rate cut by the Bank of England, triggering a sell-off of the pound. However, the dollar is also facing selling pressure due to speculation about a U.S. rate cut. Therefore, dollar behavior will dominate the market. The market will especially focus on the FOMC minutes on August 20th and FRB Chair Powell's speech on August 22nd.

Next is an analysis of the GBPUSD daily chart.

Last week, the pair offset July's plunge as it has continued to climb since hitting a bottom of 1.3139. If the pair breaks above 1.36, it may be safe to say that it has returned to the uptrend.

We continue with an analysis of the GBPUSD weekly chart.

After falling below the middle line, the pair rebounded to the 1.36 level. If the pair clearly breaks above +1σ, it may continue to rise. Therefore, it is safe to say that the current uptrend will likely continue.