Dollar Gains Amid US-China Summit Optimism

Asian currencies traded within a tight band on Wednesday as investors awaited the outcome of the US-China summit, which began later in the day. The dollar edged higher, gaining about 0.1% against a basket of major currencies, while the yuan's pair rose 0.05%. Market focus was on Chinese President Xi Jinping's visit to Washington, where he will meet with US President Donald Trump to discuss key issues, including artificial intelligence and trade.

The summit is seen as crucial in extending the ongoing trade truce between the two nations before it expires in early-November. Rare earth exports and agricultural purchases are also expected to be key points of discussion. In addition, Trump and Xi will likely address the Iran conflict, following recent talks between US officials and their Iranian counterparts.

The Australian dollar lagged its peers due to a sharp deterioration in business activity, as revealed by September's purchasing managers index data. The pair fell 0.15% amid concerns over sticky inflation and rising interest rates, which may limit the Reserve Bank of Australia's ability to raise interest rates further.