The dollar remained on the front foot in Asia on Wednesday, holding on to overnight gains against major peers as investors sought the safety of the currency amid risks from a floundering Chinese economy and downgrades for U.S. banks.
The risk-sensitive Australian and New Zealand dollars wallowed near multi-month lows. The Chinese yuan, however, got some respite after the central bank set a stronger official rate than expected, signalling its discomfort with recent declines.
The U.S. dollar index - which measures the currency against the euro, yen and four other counterparts - was little changed at 102.50 in the Asian morning, following a 0.47% rise in the previous session.
Worries about the global economy flared again after data on Tuesday showed Chinese imports and exports contracting faster than expected in July.
Data on Wednesday showed China's consumer prices fell for the first time in more than two years in July, fanning deflation fears, although the decline of 0.3% was slightly less than forecast in a Reuters poll.
The dollar eased 0.12% to 7.2274 yuan in offshore trading after the People's Bank of China set the midpoint rate for onshore trading at 7.1588, much stronger than the Reuters estimate of 7.2198.
The Aussie , which often acts as a proxy for China's economic outlook, was about flat at $0.6543, after dipping on Tuesday to the lowest since June 1 at $0.6497.
New Zealand's kiwi slipped 0.16% to $0.6054, edging back towards the previous session's two-month low of $0.6035.
The U.S. dollar was firm despite some more dovish signals coming from Federal Reserve officials overnight, with Philadelphia Fed President Patrick Harker suggesting interest rates are high enough already, echoing the view of Atlanta Fed President Raphael Bostic.
Source: Reuters
