Investing.com – The Japanese yen gave up early gains in Asia on Wednesday after producer prices came in slightly below expectations.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, eased 0.05% to 91.84.
Overnight, the dollar was roughly unchanged against a basket of major currencies on Tuesday, as data showed U.S. labor demand remained strong but gains were capped as sterling jumped to a twelve-month high following bullish inflation data.
The U.S. Labor Department’s latest Job Openings and Labor Turnover Survey (JOLTs) report, a measure of labor demand, showed job openings in July improved to about 6.2m, beating expectations of 5.96m.
The labor report comes ahead of crucial consumer and producer inflation data due Wednesday that could influence the Federal Reserve’s decision on monetary policy. The Federal Open Market Committee (FOMC) meeting is slated for September 19.
Meanwhile, safe-haven demand continued to fade despite North Korea threatening the United States with the “greatest pain” it has ever suffered following new sanctions imposed by the United Nations. The dollar added to recent gains against both the yen and Swiss franc.
The outlook for the greenback, however, remains bearish as speculators ramped up short bets against the greenback to a nearly 5-year high last week, according to data from Commodity Futures Trading Commission.
The pound rose to its highest this year against dollar, hitting $1.3288 amid inflation data that topped expectations.
Inflation, as measured by the consumer price index, rose to 2.9% year on year in August, up from 2.6% the previous month.