Oil prices extended their recent slide on Wednesday, with Brent crude futures LCOc1 down 1.8% at $86.99 after Iran said it had restarted talks with neighbour Oman to manage the Strait of Hormuz and diplomatic negotiations between Washington and Tehran remained stalled.
The U.S. dollar also climbed 0.1% against the Canadian dollar CAD= to C$1.3861 per dollar, extending its gains against the loonie into a third consecutive day after Ottawa hit back on Tuesday with retaliatory tariffs on about $20 billion worth of U.S. annual imports and rolled out aid for businesses and workers, after trade talks with Washington collapsed last week.
The New Zealand dollar NZD= was down 0.4% at $0.5954, encountering resistance after rallying ahead of an interest rate decision from the Reserve Bank of New Zealand next Wednesday. The market overwhelmingly expects the central bank to hike interest rates by 25 basis points to 2.75%, according to LSEG data.
Against the yen JPY=, the U.S. dollar was down 0.2% at 158.98 yen, remaining firmly below levels that triggered joint intervention by U.S. and Japanese officials in the past month. Influential currency investor Stephen Jen said the joint action marked a "watershed moment" for the currency.
Japan's central bank said on Wednesday that Governor Kazuo Ueda will not attend the U.S. Federal Reserve's annual Jackson Hole gathering this week due to a schedule conflict. Bank of Japan board member Naoki Tamura will attend on his behalf.
A majority of economists in a Reuters poll said the Bank of Japan will likely move more swiftly than previously expected and raise interest rates again in September, with the terminal rate also likely to be higher.
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