SINGAPORE - The dollar was firm on Wednesday and trading on the precipice of the 160 yen barrier as investors turned cautious and counted down to the release of U.S. price data at the end of the week.
Markets are banking that Friday's U.S. data shows annual growth in the Federal Reserve's favoured core personal consumption expenditure index slowed to 2.6% in May, the lowest in more than three years and opening the way to rate cuts. The Australian dollar dipped 0.1% to $0.6640 and the New Zealand dollar similarly slipped to $0.6115, with small moves reflecting thin trade.
Along with the yen, China's yuan is also getting squeezed by the dollar's stubborn strength. China has seemed to signal some tolerance for a cheaper currency by gradually weakening the midpoint of the yuan's daily trading range on the dollar.The yuan has hugged the low side of its band for months and was last at 7.2884 per dollar in offshore trade.