Dollar moves in a narrow range ahead of inflation data

"Signs of Middle East de-escalation, including ​plans to return U.S. diplomatic staff to the region and efforts to reopen the Strait between Iran and Oman, ​weighed on oil prices and supported broader risk sentiment," Westpac analysts wrote in a note.

The U.S. ⁠dollar index, which measures the greenback's strength against a basket of six currencies, snapped a three-day winning streak on Tuesday, ​and was holding steady at 98.918 in early Asian trading.

Oil prices slid in the Asian day on Wednesday, with Brent crude down ​2.1% at $86.68, as Iran said it had restarted talks with neighbour Oman to manage the Strait of Hormuz and diplomatic negotiations between Washington and Tehran remained stalled.

The Australian dollar was up 0.1% at $0.7172 after the release of data showing the trimmed mean CPI inflation measure rose at an annualised rate ​of 3.6%. Its kiwi counterpart was down 0.2% at $0.5962 ahead of an interest rate decision from the Reserve Bank of New Zealand ​next Wednesday.

The market overwhelmingly expects the central bank to hike interest rates by 25 basis points to 2.75%,.

However, the ‌U.S. ⁠dollar weakened 0.1% against the Canadian dollar to C$1.38405 per dollar, retracing some of its gains against the loonie over the past two days after Ottawa hit back on Tuesday with retaliatory tariffs on about $20 billion worth of U.S. annual imports and rolled out aid for businesses and workers, after trade talks with Washington collapsed last week.

YEN STEADYThe euro was flat at $1.1675, while the British pound ​was also unchanged at $1.3647. The yen ​was steady at 159.14 yen, ⁠remaining firmly below levels that triggered joint intervention by U.S. and Japanese officials in the past month.

Influential currency investor Stephen Jen said that the move marked a "watershed moment" for the currency. The ​central bank said on Wednesday that Governor Kazuo Ueda will not attend the U.S. Federal Reserve's ​annual Jackson Hole ⁠gathering this week due to a schedule conflict.

Bank of Japan board member Naoki Tamura will attend on his behalf. A majority of economists in a Reuters poll said the Bank of Japan will likely move more swiftly than previously expected and raise interest rates again ⁠in September, ​with the terminal rate also likely to be higher.

Cryptocurrencies continued to roar back ​to life as investors revived dollar debasement trades. Bitcoin was up 0.8% at $78,829.03, while ether was up 0.7% at $2,453.10. So far this month, they are up ​25% and 31%, respectively.

However, gold slipped 0.5% to $4,633.94, paring its monthly gains to 15%.