The US dollar is consolidating following yesterday's CPI-driven decline. Notably, the dollar has climbed back above JPY159, despite growing speculation that the Bank of Japan (BOJ) intervened yesterday. Additionally, there have been reports of the BOJ monitoring the euro-yen cross in today's local session.
US index futures are mixed ahead of the US Producer Price Index (PPI) release. Gold, which surged past $2400 yesterday to nearly $2425, has softened today, testing the $2400 support level. September WTI crude oil has reached a four-day high, trading above $82, with Monday's high being $82.50.

Asia-Pacific Markets
Market participants are speculating about potential BOJ intervention following yesterday's soft US CPI data. A Japanese TV report, citing an unnamed source, claimed that intervention occurred. Despite the uncertainty, it is clear that the dollar dropped sharply from around JPY161.60 just before the US CPI release to a session low of JPY157.45 shortly after.
The Australian dollar also experienced volatility, initially rising from $0.6750 to almost $0.6800 post-CPI, but it has since returned to previous levels. Today, the Aussie is trading with a firmer bias.

European Markets
The euro experienced a half-cent rally to $1.09 following the US CPI release, breaking out of its short-term flag pattern. However, it stalled near the upper range of its recent trading band, remaining within a $1.0860-$1.0890 range today.
Sterling reached nearly $1.2950 yesterday, its highest level since last July, surpassing three-standard deviations above the 20-day moving average. After an initial pullback, sterling found support around $1.2900 and has pushed above $1.2950 in the European session.

American Markets
The soft June CPI report has bolstered the Federal Reserve's confidence that inflation is moving towards its target, though a rate cut at this month's FOMC meeting remains unlikely. However, the derivatives market is pricing in a rate cut for September and another before year-end. Today's PPI report will provide further insights for economists to finalize their forecasts for the PCE deflator.
The Canadian dollar, along with the Norwegian krone, struggled to gain traction against the US dollar among G10 currencies.