OCBC Bank strategists Sim Moh Siong and Christopher Wong observe that USD/KRW has consolidated after sharp declines over the past eight sessions, with exporter and month-end US Dollar (USD) selling offset by a firmer USD tone and foreign equity outflows.

The USD/JPY drifts higher for the third straight day, up a modest 0.11%, as buyers reaffirm their control over price action despite uncertainty over another round of intervention by Japanese authorities. The pair trades at 159.38 at the time of writing.

Scotiabank strategists Shaun Osborne and Eric Theoret report the Euro (EUR) is slightly softer versus the Dollar, with its late-July rally stalling as price action mirrors yield spreads.

The USD/CAD pair bounces off daily lows at 1.3833 and is up about 0.26% on Wednesday, driven by sticky US inflation data, which triggered a jump to new weekly highs amid an ongoing short-term downturn. At the time of writing, the pair trades at 1.3873.

Scotiabank strategists Shaun Osborne and Eric Theoret highlight that the Canadian Dollar (CAD) is slightly softer, tracking broader USD gains and weaker Oil, while USD/CAD trades almost exactly at their fair value estimate near 1.3862.

The Swiss Franc (CHF) weakens against the US Dollar (USD) on Wednesday as the Greenback attracts buyers following the release of the latest United States (US) inflation data. Traders also remain attentive to developments in the Middle East.

Sterling retreats some 0.39% as the US Dollar stages a recovery after a US inflation report revealed that prices remained elevated, increasing the chances of seeing a rate hike by the Federal Reserve (Fed) towards the end of the year.

EUR/GBP is trading around 0.8570 on Wednesday, on the front foot as hopes of a de-escalation in the Gulf hand the Euro (EUR) a modest lift.

NZD/USD retreats to around 0.5940 on Wednesday at the time of writing, down 0.60% on the day. The New Zealand Dollar (NZD) loses ground against the US Dollar (USD), which finds some support following the release of the latest United States (US) inflation data.

Silver (XAG/USD) comes under selling pressure on Wednesday as the US Dollar (USD) strengthens following the latest United States (US) inflation data. At the time of writing, XAG/USD trades around $67.79, down nearly 1.26% on the day.

AUD/USD is trading around 0.7170 on Wednesday, down slightly after a hot Australian inflation print ran straight into a firmer US Dollar.

USD/CAD rises 0.30% on Wednesday, trading around 1.3880 at the time of writing.

The Japanese Yen (JPY) gives up its earlier gains against the US Dollar (USD) on Wednesday as traders react to the latest United States (US) inflation data. At the time of writing, USD/JPY trades around 159.41, recovering from an intraday low of 158.88.

The Australian Dollar (AUD) is outperforming across global FX markets following higher-than-expected Consumer Price Index (CPI) data for July, which sharply lifted expectations for additional Reserve Bank of Australia (RBA) interest-rate hikes. 

GBP/USD falls to a five-day low on Wednesday as traders react to the latest United States (US) Personal Consumption Expenditures (PCE) Price Index data. At the time of writing, the pair trades around 1.3603, down roughly 0.33% on the day.

EUR/USD trades under modest pressure on Wednesday after the US Personal Consumption Expenditures (PCE) Price Index delivered a mixed inflation picture. Headline inflation came in above expectations, supporting the US Dollar (USD), although an in-line core reading limited the market reaction.

BNY’s Geoff Yu reports that Washington is considering further trade penalties against Canada after Ottawa’s dollar-for-dollar retaliation to new U.S. tariffs. Canada plans to double counter-tariffs on U.S. steel and aluminum and add new duties on a range of goods.

Brown Brothers Harriman’s (BBH) Elias Haddad reports the Australian Dollar (AUD) is outperforming after hotter-than-expected July Consumer Price Index (CPI) data lifted Reserve Bank of Australia (RBA) rate hike expectations.

EUR/GBP edges higher on Wednesday, though price action remains confined to the narrow range that has been in place since late July, largely between 0.8540 and 0.8580.

Rabobank's Senior FX Strategist Jane Foley reviews Japan’s FX intervention and its impact on USD/JPY.

The Indian Rupee (INR) is expected to open on a positive note against the US Dollar (USD) on Thursday after a holiday on Wednesday on account of Id-e-Milad. On Tuesday, the USD/INR pair declined 0.35% to near 95.40 due to weaker oil prices, which also led to a sharp decline in US Treasury Yields.

BNY's Geoff Yu highlights that European Central Bank (ECB) Executive Board member Isabel Schnabel sees further rate hikes as necessary, with Euro area inflation risks still tilted to the upside and growth more resilient than expected.

The Japanese Yen (JPY) ticks higher against the US Dollar (USD) on Wednesday but keeps looking for direction, as investors bide their time, awaiting an array of key US macroeconomic releases due later on the day.

The British Pound (GBP) pares gains against the US Dollar (USD) on Wednesday, with bears testing the bottom of the intra-week trading range at the 1.3620 area, after failure to breach resistance at 1.3660.

The US Dollar (USD) trades 0.2% higher at around 1.3870 against the Canadian Dollar (USD) during the European trading session on Wednesday. The Loonie pair strengthens as the Canadian Dollar underperforms due to trade tensions between the United States (US) and Canada.

MUFG’s Derek Halpenny notes the Japanese Yen is firmer versus most G10 currencies as markets increasingly price a Bank of Japan rate hike in September.

EUR/JPY depreciates after registering modest gains, trading around 185.60 during the European hours on Wednesday. The technical analysis of a daily chart indicates that the currency cross is remaining within the ascending channel pattern, signaling an ongoing bullish bias.

The Swiss Franc (CHF) is trading lower against the US Dollar (USD) on Wednesday, but it has managed to trim some losses after the release of an upbeat Swiss ZEW Economic Expectations Index.

AUD/USD extends its gains for the second consecutive day, trading around 0.7180 during the European hours on Wednesday.

The Australian Dollar (AUD) trades 0.13% higher at around 114.30 against the Japanese Yen (JPY) during the European trading session on Wednesday.