Asian currencies rose slightly

Yun Shang Hui Xin Limited

Most Asian currencies inched higher on Wednesday, recouping recent losses as risk appetite soured in favor of the dollar, while the yuan rose in volatile trade after weak inflation data.

The greenback edged lower in Asian trade, but remained strong so far this week as weak economic signals from China and uncertainty over the Federal Reserve spurred safe-haven demand for the greenback.

The U.S. dollar index and U.S. dollar index futures both fell about 0.1% on Wednesday, but were still up 0.4% for the week

The yuan rose 0.4% to 7.1883. But the currency saw wild swings, rising 1% earlier in the session before giving up nearly all of those gains.

YSHX

The yuan was the best performer among Asian currencies on Wednesday, as of 00:17 ET，China's consumer price index (CPI) inflation rate fell 0.3% in the 12 months to July, the first decline in nearly two years. While Chinese officials said the drop was only temporary, the data still pointed to deteriorating economic conditions in the country.

CPI growth edged up in July from the previous month, while producer price index (PPI) growth also slowed. The data stoked optimism that Chinese inflation would eventually pick up in the coming months, especially if Beijing rolls out more stimulus.

But the drop in annual consumer prices, combined with disappointing Chinese trade data on Tuesday, still point to a slowing post-pandemic recovery in Asia's largest economy. The data also dented confidence in broader Asian markets.

The South Korean won fell 0.2 percent as an unexpected rise in unemployment boosted expectations that the Bank of Korea would cut interest rates sooner than expected.

The yen rose 0.1% after falling sharply over the past two sessions amid growing uncertainty over the Bank of Japan's monetary policy plans.

The Australian dollar rose 0.1%, also recovering from two days of losses, while the Indian rupee rose 0.1% ahead of Thursday's Reserve Bank of India meeting.