Peter Nurse

Investing.com – The dollar edged higher Tuesday, rebounding from a one-month low although gains are small ahead of the release of key economic data and next week’s Federal Reserve meeting.

At 2:55 AM ET (0755 GMT), the Dollar Index, which tracks the greenback against a basket of six other currencies, traded 0.1% higher at 93.882, climbing just above Monday’s one-month low.

traded 0.2% higher at 113.91 after Japan’s for September rose 0.9% year-on-year. It fell 0.3% to 0.7511, and edged lower at 1.1604, while risk sensitive rose 0.3%.

The dollar was hit late last week following comments by Federal Reserve Chair Jerome Powell stating that it’s not yet time to begin raising U.S. interest rates.

The Fed has now gone into a blackout period ahead of next week’s policy-setting meeting, an eagerly-anticipated gathering where the central bank is expected to confirm the start of the withdrawal of its bond-buying stimulus.

Markets will concentrate on U.S. data in this absence of Fed communication. Tuesday’s data slate includes for September and October numbers, but it’s the 3Q release on Thursday and the September on Friday that will attract the most attention.

“In the absence of any Fed speakers before the 3 November FOMC meeting we think that the persistence in inflation can continue to support the market re-pricing of the Fed curve – and be supportive for dollar strength against the low yielders,” said analysts at ING, in a note.

Other currencies fell 0.1% after Erdogan reneged on his request that 10 Western Ambassadors leave Turkey due to the criticism of the detention of a government critic. The move was a deescalation of an already volatile diplomatic dispute that had shaken the currency.

Following Monday’s record-breaking drop in the value of the Turkish currency against USD, it has recovered.

Additionally, fell 0.1% to 6.3819 after China’s central bank injected a net $190 billion yuan ($30 billion) into the financial system, resulting in the overnight interbank repo rate dropping as much as eight basis points to 1.53%, the lowest since September 29 and near a nine-month low.