Dollar firmer as markets await US inflation data for Fed clues
The dollar nudged a little higher in Asian trade on Wednesday, receiving limited additional strength after renewed attacks on shipping in critical waterways in the Middle East, as currency markets anxiously awaited the release of inflation data later in the global day.
The US dollar strengthened slightly in Asian trading on Wednesday, gaining minimal traction following fresh assaults on shipping routes in the Middle East, as investors kept a vigilant eye on upcoming US inflation data and Federal Reserve clues. The Japanese yen weakened marginally against the dollar by 0.1 percent to 159.44 yen, marking its weakest point of the month even after a coordinated effort by US and Japanese authorities to bolster the yen.
The euro slipped by 0.1 percent to $1.1534, while the British pound remained steady at $1.3505. The Australian dollar declined by 0.1 percent to $0.7056, and the New Zealand dollar dropped 0.3 percent to $0.5866 following Prime Minister Christopher Luxon's successful confidence vote in his ruling party lawmakers. Market analysts and investors are eagerly anticipating the release of US inflation figures later in the day for insights into the Federal Reserve's potential interest rate decisions, as last week's disappointing jobs report and Fed Chair Kevin Warsh's recent press conference failed to quell concerns about inflation and policy direction.
Analysts suggest that a soft inflation landing is currently priced into the market, with the US dollar index up 0.1 percent at 99.89. If the Consumer Price Index (CPI) data exceeds expectations, speculators may reduce their long USD positions against currencies such as the NZD, EUR, and JPY, which are viewed as favorable candidates for a September interest rate hike.
Oil prices ticked upward in Asian trade, with Brent crude soaring 0.3 percent to $89.69 per barrel following an attack by Iran-backed Houthis on a cargo ship in the Bab el-Mandeb strait and a US military strike on a container ship near Pakistan attempting to disrupt the Strait of Hormuz blockade. Fed officials remain divided on the central bank's next move, with Fed funds futures suggesting a 50% probability of a rate hold during the September 16 meeting, alongside an equal chance of a quarter-point rate increase.
Written by urgent.news from The Jakarta Post's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
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