Asia FX: Aussie slides on soft CPI; won firms ahead of Fed decision

The article says the Australian dollar weakened after Australia’s inflation data came in below expectations, reducing market confidence in another Reserve Bank of Australia rate hike. Broadly, Asian FX traded cautiously ahead of the Federal Reserve’s policy decision, with the U.S. dollar holding near a one-month high and the DXY near 101.3. Safe-haven demand was supported by renewed U.S.-Iran hostilities and higher oil prices, keeping risk appetite subdued. The South Korean won strengthened, while the euro and British pound traded near recent lows. Several Asian currencies, including the Chinese yuan, Singapore dollar, Indian rupee, Thai baht, and Malaysian ringgit, were range-bound as investors waited for clearer Fed guidance. The market is still pricing around a 33% chance of a 25-basis-point rate hike, though rates are expected to remain unchanged. Overall sentiment is mixed, with the USD firm and most Asia FX under pressure ahead of central-bank catalysts.