On Wednesday, the euro to dollar exchange rate edged higher as the US consumer price index declined.
Accordingly, the euro to dollar exchange rate hiked 0.05% to $1.18.
The US inflation slowed from the expected rise as the consumer price index declined 0.30% from the previous rate of 0.50%.
In addition, the CPI fell from analysts’ forecast of 0.40%
Then, the core inflation, which measures the changes in the price of goods and services excluding food and energy, tumbled 4.00% from 4.30%.
Subsequently, the data came in lower than the expected figure of 4.20%.
In line with this, several Fed officials suggested that the central bank would reduce its bond-buying this year.
Investors also turned their attention to the release of the eurozone industrial production today.
Moreover, the forecasted industrial production increased to 0.60% from the previous rate of 0.30%.
Additionally, market participants expected hints on the possible direction of the monetary policy from the speech of ECB Chief Lane later this day.
Meanwhile, the EUR/CHF pair steadied at $1.09 as the EUR/GBP pair climbed 0.05% to $0.86.
The EUR/NZD pair also improved 0.09% to $1.66, while the EUR/AUD declined 0.03% to $1.61.
Then, the yen exchange rate against the euro soared 0.10% to $0.77.
Consequently, the US dollar index modestly climbed 0.02% to $92.64 as the dollar weakened against its rival currencies.
Furthermore, investors eyed Fed’s monetary policy meeting next week as market participants look upon the possible start of asset tapering.
Additionally, US August industrial production will be released today as the forecasted data tumbled 0.40% from the previous gain of 0.90%.
AUD to USD Exchange Rate Up as Euro Hiked
Meanwhile, the AUD to USD exchange rate edged up as the euro to dollar exchange rate hiked.
Accordingly, the Aussie dollar improved 0.02% to $0.73.
Moreover, the Australia Westpac consumer sentiment soared 2.00% from the previous decline of 4.00%.
Then, the Reserve Bank of Australia highlighted the effect of the pandemic on the economic recovery of the country.
Consequently, coronavirus cases climbed to 1,685 as restrictions on travel permits weighed on the AUD to USD exchange rate.
Subsequently, investors also anticipate the release of the Aussie’s jobs report later this day.
The employment change for July was 2,200 and analysts forecasted -90,000 for August.
Additionally, the expected unemployment rate climbed 4.90% from 4.60%.
Furthermore, the NZD to USD exchange rate inched down to 0.11% to $0.71.