Investing.com– Most Asian currencies were little changed on Wednesday as the U.S. dollar eased from an 18-month high, with investors awaiting key U.S. inflation data for clues on the Federal Reserve’s interest-rate outlook.
Market participants also assessed Chinese inflation and trade figures, along with Singapore’s monetary policy decision and economic growth data.
The US Dollar Index, which measures the greenback against a basket of major currencies, slipped 0.1% to 102.09, extending a 0.4% decline on Tuesday after reaching its highest level since April 2025 earlier this week.
Asia FX muted ahead of U.S. CPI
The Japanese yen’s USD/JPY pair ticked down 0.1%.
The Chinese yuan’s onshore USD/CNY and offshore USD/CNH pairs traded largely unchanged.
Investors were focused on the September U.S. consumer price index report due later on Wednesday.
Economists expect headline inflation to accelerate to 3.6% year-on-year from 3.4% in August, with a stronger-than-expected core reading potentially reviving expectations of a Federal Reserve rate hike this month.
Markets were pricing in roughly a 22% chance of a quarter-point rate increase at the Fed’s Oct. 27-28 meeting, with the probability of a pause near 78%.
The Fed raised its benchmark rate by 25 basis points in September to a range of 3.75%-4.00%, its first increase since 2023.
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Its latest projections showed that 16 of 18 policymakers expected at least one further hike this year, while futures markets indicated an 85% chance of at least one increase by December
China inflation, trade data and Singapore GDP in focus
Elsewhere in Asia, the South Korean won’s USD/KRW pair fell 0.4%, while the Singapore dollar’s USD/SGD edged up 0.1%.
The Australian dollar’s AUD/USD pair rose 0.2%.
The Indian rupee’s USD/INR pair traded largely flat on Wednesday after rebounding sharply from a near-record low on the Reserve Bank of India’s broad package of foreign exchange measures.
In China, data showed that consumer inflation edged up to 0.9% year-on-year in September from 0.8% in August, missing forecasts for 1.0%, while producer prices rose 5.0%, their fastest pace since June 2022.
The producer price index exceeded expectations for a 4.5% increase as higher oil and commodity prices pushed up factory-gate costs.
Moreover, China’s exports surged 36.3% in U.S. dollar terms in September from a year earlier, far exceeding forecasts for 25.5% growth, while imports rose 31.0%, also beating expectations.
