The dollar held just above an over one-year low on Wednesday as traders assessed the U.S. rate outlook, while the New Zealand dollar spiked briefly after a higher-than-expected inflation reading pushed back prospects of policy easing further out.
The U.S. dollar managed to nudge up after a mixed retail sales report overnight, with sales growth missing forecasts in June but consumers boosted or maintained spending elsewhere, pointing to consumer resilience that is likely to keep the economy on a solid growth path.
Against a basket of currencies, the U.S. dollar rebounded from a 15-month low hit in the previous session, with its index steadying at 99.943 in early Asia trade.
The greenback has paused its steep decline from last week in the wake of a cooler-than-expected U.S. inflation reading that led to traders pricing in an imminent peak in U.S. rates.
Economists polled by Reuters expect the Federal Reserve to deliver a 25-basis-point rate hike at its upcoming policy meeting this month, with a majority betting that to bring an end to the central bank's current monetary tightening cycle.
The euro was last steady at $1.1230, away from the previous session's 17-month peak of $1.1276.
Sterling bought $1.3035, ahead of UK inflation data due later on Wednesday.
The Australian dollar was last 0.08% lower at $0.68065.
Elsewhere, the Japanese yen fell marginally to 138.88 per dollar.
Bank of Japan Governor Kazuo Ueda said on Tuesday there was still some distance to sustainably and stably achieving the central bank's 2% inflation target, signalling his resolve to maintain ultra-loose monetary policy for the time being.
Source : Reuters
