Dollar Range Bound as Markets Await Inflation Data and Jackson Hole Signals

The US dollar traded in a narrow range on August 26 as investors await key inflation data and signals from central banks. The currency market is focused on the July Personal Consumption Expenditures Price Index, or PCE, which is seen as an important indicator of inflation in the United States.

Oil prices declined due to signs of de-escalation in the Middle East, including plans to return US diplomatic personnel and efforts to restore shipping through the Strait of Hormuz. This has pushed oil prices lower and supported demand for risk assets, according to Westpac analysts.

The Australian dollar rose 0.1% to $0.7172 as inflation data supported the currency, with the trimmed-mean core consumer price index increasing by 3.6% year on year. In contrast, the New Zealand dollar lost 0.2% and traded at $0.5962, awaiting the Reserve Bank of New Zealand's rate decision next week.