Investing.com - The Australian and New Zealand dollar moved lower against their U.S. counterpart on Wednesday, after the release of downbeat Australian inflation data, although sentiment on the greenback was also vulnerable ahead of the Federal Reserve’s upcoming policy decision.
AUD/USD declined 0.66% to 0.7885, the lowest since July 21.
Earlier Wednesday, the Australian Bureau of Statistics said its consumer price index rose 0.2% in the second quarter, disappointing expectations for an increase of 0.4% and after a 0.5% gain in the three months to March.
Year-on-year, consumer prices increased by 1.9%, compared to expectations for a 2.2% climb.
NZD/USD eased 0.08% to trade at 0.7412 even as Statistics New Zealand said the trade surplus grew to NZ$242 million last month from NZ$74 million in May, whose figure was revised from a previously estimated surplus of NZ$103 million.
Analysts had expected the trade surplus to hit NZ$100 million in June.
Meanwhile, investors were hoping that the Fed’s rate statement, due later Wednesday, will reveal more about policy plans for the second half of the year, with markets paying close attention to details of when and how the Fed will start reducing its $4.5 trillion balance sheet.
Doubts over the Feds plans for a third rate hike this year have recently weighed on the greenback.
Investors also remained focused on the investigation into alleged links between U.S. President Donald Trump’s administration and Russia in last year’s election.
On Monday, Jared Kushner, Trump’s son-in-law and a senior White House adviser, told Senate investigators he had met with Russian officials four times last year but said he did not collude with Moscow.
Investors fear the persistent political turmoil will derail the Trump administration’s pro-growth economic agenda of tax cuts and infrastructure spending, which helped propel the dollar to 14-year peaks after the November election.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was up 0.09% at 94.00, just off the previous session’s 13-month low of 93.46.