Most Asian currencies moved little on Wednesday, while the dollar retreated further as markets awaited more cues on monetary policy from key inflation data and the minutes of the Federal Reserve\u2019s March meeting due later in the day.<\/p>\n
A\u00a0warning on a potential recession<\/a><\/span>\u00a0from Minneapolis Fed President Neel Kashkari also kept sentiment subdued, although he also warned that higher\u00a0inflation<\/a>\u00a0was likely to be worse for the jobs market.<\/p>\n The dollar took little support from Kashkari\u2019s comments, with the\u00a0dollar index<\/a><\/span>\u00a0and\u00a0dollar index futures<\/a><\/span>\u00a0both down about 0.2%. But futures were trading at a lower level than the index, indicating that investors are likely positioning for more weakness in the greenback.<\/p>\n Still, Asian currencies saw few bids on this notion, as anticipation of U.S.\u00a0consumer price index<\/a><\/span>\u00a0(CPI) inflation data kept traders wary of risk-driven assets. The\u00a0Chinese yuan<\/a><\/span>\u00a0was largely flat at 6.8871 against the dollar, while the\u00a0Japanese yen<\/a><\/span>\u00a0fell 0.1%.<\/p>\n Japanese data also showed that\u00a0producer price index<\/a><\/span>\u00a0inflation eased for a second consecutive month in March.<\/p>\n The\u00a0South Korean won<\/a><\/span>\u00a0lost 0.2%, while the\u00a0Australian dollar<\/a><\/span>\u00a0was among the few outperformers, rising 0.4% as it recovered from steep losses.<\/p>\n The U.S. CPI data is expected to show that overall inflation eased further in March from the prior month. But\u00a0core CPI<\/a><\/span>, which excludes volatile food and fuel prices, is expected to remain stubbornly high.<\/p>\n Focus is also on the\u00a0minutes<\/a><\/span>\u00a0of the Fed\u2019s March meeting, due later on Wednesday. While the Fed had vowed to keep raising interest rates further, the recent collapse of several U.S. banks and a swathe of weak economic readings saw markets doubt just how much headroom the central bank has to keep raising interest rates.<\/p>\n Wednesday\u2019s inflation reading is also expected to provide more insight into how much further the Fed needs to tighten policy.<\/p>\n Some Asian economic readings were also in focus this week. The\u00a0Indian rupee<\/a><\/span>\u00a0was flat ahead of local\u00a0CPI data<\/a><\/span>\u00a0due later on Wednesday, which is expected to show that inflation eased substantially through March.<\/p>\n The reading also comes shortly after the\u00a0Reserve Bank of India<\/a><\/span>\u00a0unexpectedly held interest rates, stating that inflation had likely peaked.<\/p>\n