By Gina Lee
Investing.com – The dollar was up on Wednesday morning in Asia. The U.S. currency remained within recent ranges as the latest U.S. inflation data raised doubts that the Federal Reserve would begin asset tapering in 2021.
The U.S. Dollar Index that tracks the greenback against a basket of other currencies inched up 0.04% to 92.648 by 10:55 PM ET (2:55 AM GMT).
The USD/JPY pair inched down 0.03% to 109.64.
The USD/CNY pair inched up 0.08% to 6.4433. China’s latest economic data earlier in the day showed industrial production grew a lower-than-expected 5.3% year-on-year, while fixed-asset investment grew 8.9% year-on-year, in August. Retail sales grew 2.5% year on year.
The GBP/USD pair inched down 0.07% to 1.3797.
The dollar has been stuck in a 92.3 to 92.9 range during the week as some Fed officials pushed for the central bank to begin asset tapering by the end of 2021.
Meanwhile, U.S. data released on Tuesday showed that the core consumer price index (CPI) grew 4% year-on-year and 0.1% month-on-month in August. The data also showed that the CPI grew 5.3% year-on-year and 0.3% month-on-month respectively.
Investors now look to the Fed’s latest policy decision, due to be handed down next week, for further timeline clues.
"The softer print eases concerns over an imminent acceleration in prices and should nullify any lingering pressure on the Fed to taper in September. But a taper this year still looks like a good bet with November or December now looking more likely," National Australia Bank (OTC: NABZY ) senior currency strategist Rodrigo Catril said in a note.
Commonwealth Bank of Australia (OTC: CMWAY ) (CBA) is more bullish on the dollar's prospects, predicting that accelerating employment costs in the U.S. will keep consumer prices elevated.
"Above‑target inflation will prove more persistent than the Fed expects," CBA strategist Carol Kong said in a report.
"The implication is the Fed will likely need to raise the Funds rate by more than what markets are currently expecting, which could support the dollar down the track,” the report added.
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