The dollar edged up slightly during Asian trading on Wednesday, gaining limited strength following renewed assaults on shipping in vital Middle Eastern waterways, as currency markets remained on edge in anticipation of forthcoming inflation data later in the global day. The yen was 0.1% weaker against the dollar at 159.44, reaching its softest levels of the month despite the recent joint intervention by U.S. and Japanese authorities to strengthen the Japanese currency, while the euro slipped 0.1% to 1.1534. The British pound remained stable at $1.3505. The Australian dollar experienced a decline of 0.1%, settling at $0.7056.

The kiwi dollar was 0.3% weaker at $0.5866 after New Zealand Prime Minister Christopher Luxon stated on Wednesday that he had secured a confidence vote from ruling party lawmakers, following speculation regarding his leadership just months ahead of a general election. The primary attention for markets this week centers on the forthcoming U.S. inflation data scheduled for release later on Wednesday, which may provide insights into the trajectory of Federal Reserve interest rates. This comes in the wake of last week’s jobs report, which was softer than anticipated, and a press conference held by Fed Chair Kevin Warsh last month that failed to alleviate prevailing uncertainties. “There is a ​path ahead for easing in inflation as we progress through the remainder of 2026,” assuming oil prices remain ​contained and the Strait of Hormuz reopens, analysts wrote. “In fact, the market is already discounting a mild inflation landing.”

The U.S. dollar index, which measures the greenback’s strength against a basket of six currencies, was up 0.1% at 99.89. “If CPI disappoints today, speculators will likely trim their long USD positions against the NZD, EUR, and JPY, the currencies with the best market bets for a September hike,” analysts wrote in a research note. Oil prices experienced a modest increase during Asian trading hours, as Brent crude rose by 0.9% to $89.69 per barrel. This uptick follows an attack by Iran-backed Houthis on a cargo ship in the Bab el-Mandeb strait, alongside a U.S. military strike on a container ship off the coast of Pakistan, which was attempting to breach the blockade of the Strait of Hormuz.

Federal Reserve Bank of Chicago President Austan Goolsbee stated on Tuesday that the central bank prioritises addressing excessive inflation over any perceived weaknesses in the labour market. However, it remains uncertain if this position aligns him with the minority of policymakers who advocated for an interest-rate increase last month. Market participants exhibit a divergence of opinions regarding the Federal Reserve’s forthcoming actions. Fed funds futures indicate a 50% likelihood that the central bank will maintain rates at its two-day meeting concluding on September 16, compared to an equal probability of a quarter-point hike, as per the CME Group’s FedWatch tool.