The Dollar Index, which tracks the greenback against a basket of six other currencies, traded 0.1% lower at 93.892
The dollar edged lower in early European trade Wednesday in calm trading ahead of next week’s Federal Reserve meeting, while the U.K. budget places sterling in focus.
The Dollar Index, which tracks the greenback against a basket of six other currencies, traded 0.1% lower at 93.892 at 0630 GMT.
USD/JPY was 0.1% lower at 114.03, EUR/USD traded 0.1% higher at 1.1603, and the GBP/USD dropped marginally to 1.3763 ahead of Britain’s annual budget.
The Federal Reserve has now gone into a blackout period ahead of next week’s policy-setting meeting, and ahead of this traders are focusing on the release of a series of important data releases.
Wednesday sees the release of the September durable goods orders, but the third quarter Gross Domestic Product (GDP) release on Thursday and the September core PCE deflator on Friday will attract the most attention.
Elsewhere, AUD/USD increased 0.2% to 0.7513 after Australian core inflation increased at its fastest annual pace since 2015, prompting traders to price in earlier hikes in interest rates.
The headline consumer price index increased 0.8% in the third quarter and 3.0% for the year, much as expected, but the annual measure of core inflation accelerated to 2.1%, well above the 1.8% expected and putting it back in the RBA’s (Reserve Bank of Australia) 2% to 3% target range for the first time in six years.
Sterling could be vulnerable Wednesday as U.K. Chancellor of the Exchequer Rishi Sunak delivers his annual budget.
The pre-budget leaks have typically involved new spending plans rather than how this is going to be paid for. That does perhaps leave GBP a little vulnerable tomorrow should the UK Chancellor announce any kind of fiscal consolidation, analysts at ING said in a note.