Asian currencies consolidate against the greenback, but may be supported by Fed rate‑cut prospects. U.S. headline inflation cooled to 3.4% year‑on‑year in July, while core CPI rose 2.5%. Headline inflation remains uncomfortably above the Federal Reserve’s 2% target and core inflation has gradually declined from May’s peak of 2.9%, says MUFG Bank’s Michael Wan in a note.

The FOMC is likely to maintain a restrictive holding pattern in September rather than toward a hike, he adds. The U.S. dollar falls 0.2% to 1414.40 won and is little changed at 159.40 yen, while the Australian dollar is 0.2% lower at US$0.7050, LSEG data shows.

Market participants are watching inflation data and Fed policy signals for clues on currency direction. A sustained shift toward rate cuts could provide additional support for Asian currencies, offsetting current consolidation pressures.