In cryptocurrencies, bitcoin BTC= was down 0.2% at $63,554.30, while ether ETH= slipped 0.1% to $1,879.62.
Oil and Fed commentary keep traders split
Oil prices edged up as trading resumed in Asia on Wednesday, with Brent crude LCOc1 0.6% higher at $89.40 a barrel after an attack by Iran-backed Houthis on a cargo ship in the Bab el-Mandeb strait and a U.S. military strike on a container ship off Pakistan attempting to break its blockade of the Strait of Hormuz.
Federal Reserve Bank of Chicago President Austan Goolsbee said on Tuesday the central bank is more concerned about too-high inflation than about any labor market weakness, although it was unclear whether that stance aligned him with the minority of policymakers who favoured an interest-rate hike last month.
Traders remain split on the Fed's next move. Fed funds futures imply a 52% chance the central bank will leave rates unchanged at its two-day meeting ending September 16, versus a 48% probability of a quarter-point increase, according to the CME Group's FedWatch tool.
Dollar trades sideways ahead of inflation data
The dollar traded sideways at the start of the Asian session on Wednesday, shrugging off renewed attacks on shipping in critical waterways in the Middle East, as currency markets awaited the release of inflation data later in the global day.
The yen JPY= was flat against the dollar at 159.275 yen, hovering around its weakest levels of the month despite the recent joint intervention by U.S. and Japanese authorities to strengthen the Japanese currency, while the euro EUR= held steady at $1.1542.
The British pound GBP= was also unchanged at $1.3508. The Australian dollar AUD= and its kiwi counterpart NZD= were both level at $0.7064 and $0.5879 respectively.
Markets watch New Zealand politics and Fed rate clues
Traders are also watching a meeting convened by New Zealand Prime Minister Christopher Luxon with National Party lawmakers in Wellington on Wednesday, amid mounting speculation over his leadership just months before a general election.
The main focus for markets this week is on the release of U.S. inflation data due later on Wednesday for clues to the direction of Federal Reserve interest rates, as last week's softer-than-expected jobs report and a press conference by Fed Chair Kevin Warsh last month did little to dispel doubts.
"There is a path ahead for easing in inflation as we progress through the remainder of 2026," assuming oil prices remain contained and the Strait of Hormuz reopens, ING analysts wrote. "In fact, the market is already discounting a mild inflation landing."
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