Asian currencies consolidated against the dollar in early trade but may be buoyed by reduced Federal Reserve rate-hike expectations following cooler-than-expected U.S. inflation data. The U.S. consumer price index for June came in well below forecasts, prompting markets to sharply unwind bets on a July rate increase. According to Commonwealth Bank of Australia international economist and currency strategist Samara Hammoud, the probability of a July hike fell from around 45% to 18% after the data release.

In currency markets, the U.S. dollar was little changed at 162.17 yen but edged 0.1% higher to 1,490.60 won, according to LSEG data. The Australian dollar rose 0.1% to US$0.6979. The moves reflect a broader reassessment of the Fed's policy trajectory as investors weigh the implications of easing price pressures for the outlook of U.S. interest rates and the dollar's strength across Asia.