Asian shares nudged higher and the dollar was at a two-month low on Wednesday ahead of crucial U.S. inflation data that will help gauge whether the Federal Reserve is at the end of its aggressive rate hike policy.
The Japanese yen strengthened against most major currencies and last fetched 139.43 against the dollar, its highest in a month.
Economists polled by Reuters expect the consumer price index, scheduled to be released later on Wednesday, to have risen by 3.1% in June, after May’s 4% increase (USCPNY=ECI). That would be the lowest reading since March 2021.
“This data point probably will not change the Fed’s well-communicated intention to resume hiking at the July FOMC meeting,” Saxo Markets strategists said in a note.
“However, if the core CPI decelerates as anticipated, investors may continue to keep the odds for September and November rate hikes low.”