[MARKET ANALYSIS] FX markets are rangebound with the dollar pausing following post-PCE gains

Rangebound dollar consolidation after a firmer inflation print is a familiar pattern in the run-up to Jackson Hole: in past episodes positioning has tended to go quiet into the symposium, with realised volatility compressing until the keynote resets the policy debate and the front end re-prices. The distinction worth drawing is between pairs driven by the domestic leg and those driven by the dollar leg. USD/JPY is the former here: hawkish BoJ rhetoric from a deputy governor follows an established pattern of verbal guidance building expectations toward further normalisation, and such commentary has historically supported the yen only when it shifts the perceived timing of the next hike rather than restating the bias. The antipodeans are reacting to the rate repricing channel: a major domestic bank pulling forward an RBA hike call after a firm CPI print is the kind of signal that has tended to keep the AUD bid on dips, with the metals bid adding a second transmission channel via terms of trade. Cable sitting beneath a round handle on underperformance with no fresh driver fits the usual profile of a pair trading as a residual of the dollar. The immediate follow-ons are the symposium speeches themselves, and whether the PCE-driven dollar bid reasserts or fades once the event risk clears.