Dollar Steady Ahead of US Inflation Data Amid Aussie Surge
The US dollar remained steady in Asian trading on Wednesday ahead of highly anticipated US inflation data. The greenback has been range-bound for the past week, drifting around a three-month low after the Treasury Department's intervention to cap long-term bond yields last week.
Analysts from Standard Chartered believe the dollar may suffer in the short term due to an 'incongruous intervention strategy' and potential carry trades. Meanwhile, the Aussie dollar gained 0.3% to $0.7183 as data showed a quicker-than-expected rate of 3.6% year-on-year for the trimmed-mean CPI gauge.
Investors are focused on the release of US personal consumption expenditures (PCE) data for July and Fed Chairman Kevin Warsh's keynote speech at Jackson Hole this week. His speech remains the most important event, with economists cautioning that he faces a difficult balancing act between defending the Fed's independence and providing clarity on its reaction function.
The dollar also climbed 0.1% against the Canadian dollar to C$1.3861 per dollar after Ottawa hit back with retaliatory tariffs and aid for businesses and workers following collapsed trade talks with Washington.