LONDON—The U.S. dollar edged lower on Wednesday but held on to most of the previous day’s gains, after leaping on Federal Reserve officials’ hints at aggressive rate hikes and drawing support amid a U.S.–China flare-up over Taiwan.
The dollar index, which tracks the greenback against six major peers, has softened from a two-decade high in mid-July as investors reined in expectations of Fed rate hikes.
But a trio of Fed officials signaled on Tuesday the central bank remains “completely united” on increasing rates to a level that will put a dent in the highest U.S. inflation since the 1980s, lifting the dollar index 0.8 percent that day….