U.S. Dollar Steadies Against Yen

The flight of capital to the safe-haven yen subsided following Stephen Bannon’s ousting from the role of a senior White House adviser. The departure of Bannon, known for his economic nationalist views, is likely to diminish tensions within the White House and the Republican Party. Federal Reserve Chairwoman Janet Yellen and the European Central Bank’s Mario Draghi will be among a host of top officials addressing this year’s annual central banking conference at Jackson Hole, Wyoming that kicks off on Thursday.

On the U.S. economic data front, the University of Michigan's Consumer Sentiment Index rallied to its highest in seven months, reflecting greater confidence in the economic outlook. USDJPY is marginally lower in Monday morning trade. The pair was last seen around 109.200.

The annual inflation rate in Canada edged higher in July amid rising gas prices, suggesting consumer price pressures are ticking up following the subdued reading in June. The consumer price index gained 1.20 %in July from a year earlier, according to data from Statistics Canada, compared to a 1.00% advance in the previous month. The July reading matched expectations of economists at the Royal Bank of Canada.

On a monthly basis, the CPI remained unchanged in July. Meanwhile, the more representative annual rate of core inflation increased 1.50% in July, versus a 1.40% rise in the prior month. The Canadian central bank last month lifted its benchmark interest rate by a quarter-percentage point on improving economic outlook, and signalled further hikes could be in the offing. Data from the overnight index swaps market suggests there is a two-in-three likelihood of an interest rate increase in October. USDCAD was last seen just above the strong support at 1.25900.