Dollar Edges Higher as Markets Await US Inflation Data

The US dollar strengthened slightly in Asian trade on Wednesday, but its gains were limited due to ongoing tensions in the Middle East and concerns about inflation. The yen was down 0.1% against the dollar at 159.44 yen, with the euro slipping 0.1% to $1.1534.

The main focus for markets this week is on the release of US inflation data later today, which will provide clues to the direction of Federal Reserve interest rates. Analysts expect a mild inflation landing, assuming oil prices remain contained and the Strait of Hormuz reopens.

Federal Reserve Bank of Chicago President Austan Goolsbee said the central bank is more concerned about too-high inflation than labor market weakness, but it's unclear if this aligns with the minority of policymakers who favor an interest-rate hike. Traders are split on the Fed's next move, with a 50% chance of leaving rates unchanged and a 50% chance of a quarter-point increase.

Cryptocurrencies were largely flat, with Bitcoin trading at $63,721.02 and Ether up 0.3% at $1,887.13.