The dollar is declining and important data may bring it back to the upside
The dollar fell in early European trade on Wednesday in quiet trading ahead of next week's Federal Reserve meeting, while the UK budget focuses on the pound.
At 2:30 AM ET (06:30 GMT), the dollar index, which measures the greenback against a basket of six other currencies, was down 0.1% at 93.892.
Also, USDJPY traded 0.1% lower at 114.03, USDJPY rose 0.1% at 1.1603, while GBP/USD marginally lowered to 1.3763 ahead of Britain's annual budget.
The Fed is also now in a hiatus ahead of next week's policy setting meeting, and prior to this, traders were focused on releasing a series of important data.
Wednesday also sees the release of durable goods orders for September, but the release of third-quarter GDP on Thursday and the core PCE deflator for September on Friday will attract the most attention.
Elsewhere, USDAUD rose 0.2% to 0.7513 after Australian core inflation rose at its fastest annual pace since 2015, prompting traders to price previous interest rate increases.
Also, the headline CPI rose 0.8% in the third quarter and 3.0% for the year, as expected, but the annual measure of core inflation accelerated to 2.1%, well above the 1.8% forecast and bringing it back to 2% at the RBA. to the 3% target range for the first time in six years.
Sterling may be weak on Wednesday as UK Chancellor of the Exchequer Rishi Sunak delivers his annual budget.
Much of the talk before this solemn news was about Sunak untied the money, after leaks that he was about to end the public sector wage freeze, but the chancellor is still having a hard time balancing this year's budget. Too much inflation and risks provoking more inflation with the BoE already considering tightening monetary policy, but too little and risks stifling an already hesitant recovery.
Previous budget leaks also included new spending plans rather than how to pay for them. Analysts at ING said in a note that this could leave the GBP a bit weak tomorrow if the UK chancellor announces any kind of fiscal consolidation.
USDCAD also traded fairly flat at 1.2391 ahead of the Bank of Canada's latest policy setting meeting later in the session. The central bank is expected to reduce its weekly government bond purchases again, the fourth time in the past 12 months that the central bank has rolled back a program, paving the way for interest rate increases to begin next year.