Dollar Edges Lower Amid Eased Rate-Hike Bets Ahead of PCE Data

The US dollar is on track for its strongest monthly performance since June, despite a minor pullback on Wednesday. The greenback slipped 0.2% to 101.22 against the basket of six rival currencies.

This pullback came after New York Fed President John Williams stated there was 'no need for urgency' to raise borrowing costs further, easing market expectations for an October rate hike. Money markets subsequently recalibrated the probability of an October rate increase down to roughly 50%, from above 70% earlier in the week.

The yen outperformed its G10 peers, rising 0.3% to 156.77 per dollar as traders treaded cautiously around official intervention risks. Japan's top currency diplomat Atsushi Mimura reiterated that Prime Minister Sanae Takaichi and Finance Minister Satsuki Katayama - in coordination with Washington - had delivered a explicit warning against disorderly yen weakness.