Interest-rate futures markets are pricing in a 45% possibility of another rate hike by year’s end.
The markets forecast US annualised core inflation to fall to 4.3% in August, though the headline number is seen ticking up to 3.6%.
The yuan had its best day in six months after authorities vowed to correct one-way moves and Reuters reported the central bank had stepped up scrutiny of dollar buying. “The result of Ueda’s comments was an intense move higher in Japanese swaps and government bond yields,” said Chris Weston, head of research at brokerage Pepperstone in Melbourne.
Due on Wednesday, markets are expecting the US figures to show annualised core inflation falling to 4.3% in August though the headline number is seen ticking up to 3.6%. The Aussie, which bounced on Monday with gains in the yuan, was last down 0.1% at US$0.6424. The New Zealand dollar also dipped 0.1% to US$0.5911.