By Gregor Stuart Hunter
SINGAPORE, Aug 26 (Reuters) - The dollar was rangebound in early Asian trading on Wednesday as an uneasy calm hung over currency markets, with investors awaiting inflation reports from major economies including the U.S. ahead of the Jackson Hole symposium this weekend.
The greenback remained pinned in the narrow trading range it has sat in for the past week against most of its major peers ahead of the release of PCE data for July later on Wednesday.
"Signs of Middle East de-escalation,
including plans to return U.S. diplomatic staff to the region and efforts to reopen the Strait between Iran and Oman, weighed on oil prices and supported broader risk sentiment," Westpac analysts wrote in a note.
The U.S. dollar index, which measures the greenback's strength against a basket of six currencies, snapped a three-day winning streak on Tuesday, and was holding steady at 98.918 in early Asian trading.
Oil prices slid in the Asian day on Wednesday, with Brent crude down 2.1% at $86.68, as Iran said it had restarted talks with neighbour Oman to manage the Strait of Hormuz and diplomatic negotiations between Washington and Tehran remained stalled.
The Australian dollar was up 0.1% at $0.7172 after the release of data showing the trimmed mean CPI inflation measure rose at an annualised rate of 3.6%.
Its kiwi counterpart was down 0.2% at $0.5962 ahead of an interest rate decision from the Reserve Bank of New Zealand next Wednesday. The market overwhelmingly expects the central bank to hike interest rates by 25 basis points to 2.75%, according to LSEG data.
However, the U.S. dollar weakened 0.1% against the Canadian dollar to C$1.38405 per dollar, retracing some of its gains against the loonie over the past two days after Ottawa hit back on Tuesday with retaliatory tariffs on about $20 billion worth of U.S. annual imports and rolled out aid for businesses and workers, after trade talks with Washington collapsed last week.
YEN STEADY
The euro was flat at $1.1675, while the British pound was also unchanged at $1.3647.
The yen was steady at 159.14 yen, remaining firmly below levels that triggered joint intervention by U.S. and Japanese officials in the past month. Influential currency investor Stephen Jen said that the move marked a "watershed moment" for the currency.
The central bank said on Wednesday that Governor Kazuo Ueda will not attend the U.S. Federal Reserve's annual Jackson Hole gathering this week due to a schedule conflict. Bank of Japan board member Naoki Tamura will attend on his behalf.
A majority of economists in a Reuters poll said the Bank of Japan will likely move more swiftly than previously expected and raise interest rates again in September, with the terminal rate also likely to be higher.
Cryptocurrencies continued to roar back to life as investors revived dollar debasement trades. Bitcoin was up 0.8% at $78,829.03, while ether was up 0.7% at $2,453.10. So far this month, they are up 25% and 31%, respectively.
However, gold slipped 0.5% to $4,633.94, paring its monthly gains to 15%.
(Reporting by Gregor Stuart Hunter; Editing by Muralikumar Anantharaman)
