Now I have the macro context. Let me write the post.

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The Week in the Dollar

DXY finished the week at 99.64, up a negligible +0.04% — effectively unchanged. Tuesday’s July CPI print (0.1% m/m, 3.4% headline, 2.5% core) came in soft enough to push back September rate-hike pricing, but the dollar clawed back losses later in the week as oil-driven inflation fears resurfaced. The net result: a flat dollar that masked sharp cross-currency moves underneath.

The real action was in commodity markets. WTI crude surged +5.40% to $82.40 and Brent ripped +6.03% to $88.59 as the US ratcheted up economic pressure on Iran over Strait of Hormuz access — a supply squeeze that fed directly into CAD and NOK strength. Gold climbed +2.10% to $4,432, reflecting risk-off demand that competed with the yen’s safe-haven role. Copper edged up +0.55%, giving AUD a modest tailwind without a breakout move.

Key Pair Breakdown

CAD/JPY +1.57% to 114.82 — The week’s biggest G10 mover and a clean expression of “oil up, yen down.” CAD benefited from Brent’s 6% surge via Canada’s energy export exposure, while JPY weakened after the Bank of Japan held rates at 1.00% in an 8-1 decision on July 31 and markets moved past intervention fears. The pair is pressing toward 115 — a level that will draw attention from both momentum and mean-reversion traders.

AUD/JPY +1.32% to 112.88 — The commodity-bloc bid extended to AUD, which drew support from the RBA holding at 4.35% on Tuesday and maintaining hawkish language about inflation remaining “too high.” The rate differential against the BoJ’s 1.00% keeps carry flows pointed long AUD/JPY. Copper’s modest +0.55% added a secondary tailwind. The pair is back above 112, testing the upper end of its August range.

GBP/JPY +1.19% to 215.67 — Sterling rode its own momentum (GBP/USD +0.60% to 1.3536) and combined it with broad yen weakness to post a clean weekly gain. The pair pushed above 215 and remains in rarefied territory. Any BoJ hawkish surprise or fresh intervention headlines would make this an obvious candidate for a sharp pullback.

NZD/JPY +1.01% to 93.88 — The smallest of the four notable moves, tracking the AUD/JPY theme at a discount. NZD/USD managed only +0.43%, so most of the NZD/JPY gain came from the yen leg. The pair is hovering just under 94 — a zone that has acted as resistance on multiple prior tests this year.

Week Ahead Setup

The yen is the pair to watch. USD/JPY closed at 159.30, up +0.90% on the week and drifting back toward the intervention zone near 160-163 that triggered reported MoF action in recent weeks. If next week’s data flow doesn’t give the BoJ cover for hawkish rhetoric, JPY crosses could extend — but the risk of sudden intervention keeps two-way volatility elevated. Traders should watch for any BoJ board member speeches signaling urgency.

Oil remains the swing factor for petro-FX. If Strait of Hormuz headlines escalate, USD/CAD (1.3872) could test the 1.38 handle and USD/NOK (9.4322) has room to grind lower. On the US side, PPI and retail sales data will either reinforce the soft CPI read or complicate it. The August 2026 US CPI report is not due until September 11, so the market will be digesting this week’s print for a while.

Bottom Line

The dollar ended the week flat but the FX market was anything but quiet — yen weakness drove the headline moves while oil’s 5%+ surge rewarded commodity-bloc longs. Heading into next week, USD/JPY near 159 is the pair most likely to force a reaction from policymakers, and that makes it the one every FX desk will have on the top screen.

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