Dollar Greenback Holds Steady as Markets Await US Inflation Data

The US dollar traded in a narrow range in early Asian trading on Wednesday. Investors remained cautious ahead of key inflation data from major economies.

Markets are also looking ahead to the Jackson Hole symposium this weekend. The US will release July personal consumption expenditures (PCE) data later on Wednesday.

The dollar index stood at 98.918. It measures the greenback against six major currencies and ended a three-day winning streak on Tuesday.

Middle East developments affect markets

Meanwhile, signs of easing tensions in the Middle East supported broader risk sentiment.

The US plans to return diplomatic staff to the region. Iran and Oman have also resumed talks over the Strait of Hormuz.

Oil Prices Crude Falls as Iran-Oman Talks Raise Hormuz Reopening Hopes

As a result, oil prices fell in Asian trading. Brent crude dropped 2.1% to $86.68 a barrel.

However, diplomatic negotiations between Washington and Tehran remain stalled.

Major currencies mixed

The Australian dollar gained 0.1% to $0.7172. The move followed data showing annual trimmed-mean CPI inflation at 3.6%.

The New Zealand dollar slipped 0.2% to $0.5962. Investors are watching next week’s Reserve Bank of New Zealand interest-rate decision.

Markets largely expect the central bank to raise rates by 25 basis points to 2.75%.

Meanwhile, the US dollar fell 0.1% against the Canadian dollar to C$1.38405.

The Canadian currency recovered after Ottawa announced retaliatory tariffs on about $20 billion of annual US imports.

Yen remains steady

The euro traded flat at $1.1675. The British pound also held steady at $1.3647.

The yen remained unchanged at 159.14 per dollar. It stayed below levels that recently prompted concerns about intervention by US and Japanese officials.

Influential currency investor Stephen Jen described the recent move as a “watershed moment” for the yen.

The Bank of Japan said Governor Kazuo Ueda will not attend this week’s Jackson Hole gathering. Board member Naoki Tamura will represent the central bank instead.

Meanwhile, a Reuters poll showed that most economists expect the Bank of Japan to raise interest rates again in September.

Bitcoin and gold move differently

Cryptocurrencies continued to gain as investors returned to trades focused on dollar depreciation.

Bitcoin rose 0.8% to $78,829.03. Ether gained 0.7% to $2,453.10.

Both cryptocurrencies have posted strong monthly gains. Bitcoin is up 25%, while ether has gained 31%.

Gold, however, fell 0.5% to $4,633.94. Despite the decline, the precious metal remains up 15% this month.