Asia FX mixed ahead of U.S. PCE inflation; Aussie dollar gains on hot CPI
Asian currencies fluctuated on Wednesday as investors awaited crucial U.S. inflation data to gauge the Federal Reserve's policy stance. The U.S. Dollar Index edged up 0.1% to 98.99, still close to a three-month low. Market participants were looking forward to the U.S. personal consumption expenditures (PCE) price index, a key inflation indicator, which was released later in the day.
The Australian dollar gained ground after a higher-than-expected consumer price index (CPI) spurred hopes of another interest rate hike. Meanwhile, the Japanese yen softened, trading near 158.97 against the U.S. dollar, below a level that warranted intervention from U.S. and Japanese officials last month.
The Australian dollar also strengthened, reaching its highest point since early June, following a robust CPI rise of 1.0% in July, above forecasts. The Reserve Bank of Australia is considering a fourth rate hike this year. Other Asian currencies, including the Chinese yuan and Indian rupee, traded relatively stagnant amid improved risk sentiment due to eased Middle East tensions. Oil prices declined as Iran resumed dialogue with Oman over the Strait of Hormuz.
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