Traders are now turning their focus to US inflation data out Friday for clues on monetary policy in the world’s top economy.
Federal Reserve speakers overnight said soft US inflation was a problem as they played down the risk of market disruption when the central bank starts shrinking its balance sheet.
The comments reinforce market expectations officials will keep interest rates on hold next month, putting pressure on the greenback.
The US dollar was weakening on forex trade Tuesday, sliding beneath 1.18 to the euro and at about 110.6 yen.
But analysts said moves this week could be muted.
“Given the enormity of inflation metrics in the Fed’s rates outlook, I suspect traders will be reluctant to commit big views prior to the event and even more so given August’s sparse liquidity conditions,” said Oanda’s Stephen Innes who heads trading in Asia
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