The U.S. dollar index increased 0.2% to 98.82 after two straight days of declines that took it to the lowest since October 21 at 98.562 on Tuesday

The U.S. dollar rose from a one-week low versus major peers on Wednesday ahead of a widely expected interest rate cut by the country’s central bank later in the day.

The Aussie dollar reversed an earlier small decline to gain 0.2% to $0.6599 after stronger-than-expected quarterly consumer price data threw into doubt a rate cut from the Reserve Bank of Australia (RBA) next week, or even at the following meeting in December.

The earliest the (RBA board) will be in a position to get more comfort on inflation is with the next quarterly print ahead of the February 2026 meeting, said Luci Ellis, chief economist at Westpac.

Even a February cut is far from certain now, given the size of the upside surprise (for inflation) this quarter, Ellis added.

The U.S. dollar index increased 0.2% to 98.82 after two straight days of declines that took it to the lowest since October 21 at 98.562 on Tuesday.

With the BOJ expected to hold rates steady when it concludes its two-day meeting on Thursday, the focus will be on any clues on the potential for a hike at its next meeting in December.

Expectations for near-term tightening have risen since the last meeting in September after one additional board member dissented in favour of a hike, taking the total to two. More officials have adopted hawkish stances in recent speeches, suggesting a shift in posture among the overall board.

However, BOJ Governor Kazuo Ueda’s unswervingly cautious tone has led market participants to expect the next rate hike in December or January, rather than this week.

The possibility of three dissenting votes at the upcoming meeting could prompt markets to price in faster and more sizable rate hikes, exerting downward pressure on USD/JPY, said Shoki Omori, chief desk strategist at Mizuho Securities.