Asian currencies showed mixed movement on Wednesday as investors positioned ahead of the U.S. Personal Consumption Expenditures (PCE) price index release due later in the day.
The Australian dollar rose 0.3% against its U.S. counterpart, supported by a stronger-than-expected July consumer price report. Monthly inflation increased 1.0%, surpassing the 0.8% consensus estimate, while annual headline inflation eased to 3.5%. Core inflation, measured by the trimmed-mean index, accelerated 0.5% month-on-month, keeping the annual rate elevated at 3.6%. Elias Haddad, global head of market strategy at Brown Brothers Harriman, noted that while risks favor a prolonged pause in the Reserve Bank of Australia’s tightening cycle, the country’s high policy rate and exposure to energy, AI and defense-linked commodities remain supportive for the currency.
The U.S. Dollar Spot Index edged up 0.1% to 98.98, while the Japanese yen strengthened 0.1% to 158.97 per dollar. The euro held near $1.1600, and the Canadian dollar declined 0.2% to C$1.3900 per dollar. Brent crude oil futures fell more than 2% to around $87 per barrel.
In trade policy, Washington’s 50% tariffs on $20 billion of Canadian exports remain in effect, with Canada’s retaliatory measures scheduled to take effect on September 8. Meanwhile, the Federal Reserve’s Kevin Warsh is set to deliver his first speech at the Jackson Hole Economic Policy Symposium on Friday, an event closely watched for signals on U.S. monetary policy direction.
