The dollar trimmed gains against the other major currencies on Wednesday after data showed that U.S. inflation ticked lower last month and as investors remained cautious ahead of the Federal Reserve’s highly-anticipated policy statement due on Thursday.
The dollar edged higher against the yen, with USD/JPY up 0.09% at 120.48.
The Commerce Department said consumer prices edged down by 0.1% last month, in line with forecasts following a 0.1% increase in July. Consumer prices inched up 0.2% on a year-over-year basis, in line with expectations.
Core consumer prices, which exclude volatile food and energy costs, increased by 0.1%, also in line with the consensus forecast and was 0.2% higher from the same month a year earlier.
Investors remained cautious amid uncertainty over whether the Fed would hike short-term interest rates for the first time in almost a decade on Thursday.
An increase in interest rates would boost the greenback by making it more attractive to yield-seeking investors.
Fed Chair Janet Yellen has said that an interest rate increase is data-dependent but has also indicated that she expects to begin raising rates before the end of the year.
The dollar was higher against the euro, with EUR/USD slipping 0.10% to 1.1261.
Final data on Wednesday showed that the eurozone CPI was flat in August, compared to expectations for a 0.6% fall.
Elsewhere, the dollar was lower against the pound and the Swiss franc, with GBP/USD up 0.74% at 1.5457 and with USD/CHF sliding 0.32% at 0.9707.
The Office for National Statistics earlier reported that the U.K. claimant count rose by 1,200 last month, compared to expectations for a decline of 5,000.
Average earnings, including bonuses, rose by 2.9% in the three months to July from a year earlier after a 2.6% increase in July, ahead of forecasts of 2.5%.
The report also showed that the U.K. rate of unemployment ticked down to 5.6% in the three months to July, better than forecasts for 5.6%.
The Australian dollar was stronger, with AUD/USD rising 0.37% to 0.7168, while NZD/USD held steady at 0.6353.
USD/CAD fell 0.27% to trade at 1.3213.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was steady at 95.69.