USD/INR – The Indian rupee opened higher against the dollar after President Donald Trump deferred the implementation of tariffs on some Chinese products, prompting a broad rally in Asian currencies and equities. The rupee opened at 71.00 compared to its previous close of 71.40. The Chinese yuan led Asian currencies higher on Wednesday after Washington delayed enacting tariffs on some Chinese imports to December 15 from September 1. Yesterday, the Office of the U.S. Trade Representative, at the time of releasing the list of Chinese goods that would be subject to tariffs from September 1, said that duties on some major categories of consumer products will be postponed to December 15. The onshore yuan was up 0.4% at 7.0266 to the dollar. The offshore yuan, which jumped 1.3% yesterday, was down 0.5% at 7.0436. Data released late yesterday showed that India’s retail inflation rate slowed to 3.15% in July from a year earlier from an eight-month high of 3.18% in the prior month. Economists had expected prices to increase by 3.20% last month.

EUR/USD – The euro was unchanged at $1.1175. European data on consumer prices and GDP is due from Europe later on Wednesday and could shape the near-term direction of the common currency. EUR/USD received a downward push from unexpectedly strong U.S. core CPI and calming news on the trade-war front, but shorts should tread carefully. Dismal German August ZEW also figured in, increasing concerns Germany is headed for recession while driving Bund yields lower and bolstering expectations of ECB stimulus in September. The U.S. inflation report led investors to pare bets on Fed rate cuts. Further downside risks came from the Trump administration's USTR saying tariffs on certain Chinese products will be delayed, rallying riskier assets and diminishing the euro's safe-haven support. However, EUR/USD bears haven't taken control yet. German's ZEW disappointment barely moved the needle on expected ECB cuts as rates markets foresee just below 35bps of easing by the end of 2020. EUR/USD resiliency suggests the ECB will have to do much more than cut rates to achieve euro weakness.

GBP/USD – Sterling was little changed at $1.2058 but remained within striking distance of $1.2015, the lowest level since January 2017. Britain will release consumer price data later on Wednesday, but uncertainty about how Britain will exit the European Union has clouded the outlook for the Bank of England's monetary policy. Sterling held near a 2-1/2 year low on Tuesday as concerns about a no-deal Brexit dominated sentiment despite data showing wage growth in the United Kingdom rose to an 11-year high. Britain's labour market showed unexpected strength in the second quarter with total earnings growth, including bonuses, rising by an annual 3.7% in the three months to June, the highest rate since June 2008. Strong labour data could put pressure on the Bank of England to hold interest rates. Presently, money markets give a 68% chance of a one quarter point rate cut by end-December.

USD/JPY – The yen rose on Wednesday as weaker-than-expected Chinese economic data reinforced the view that resolving the trade war was a long way off even if U.S. President Donald Trump had delayed some additional tariffs. News the United States would delay some tariffs supported Asian stocks, but optimism in the currency market quickly faded on broader concerns there are no quick solutions to the trade row, which economists say is dragging on China's economy and threatening global growth. Increasingly violent clashes between protesters and police in Hong Kong, worries about Britain's exit from the European Union, and Middle East tensions mean risk aversion could quickly flare up again and roil major currencies. The dollar fell 0.41% to 106.35 yen.

Currency Range for today

Important data releases today