The Australian dollar edged higher to around $0.659 on Thursday, recovering from the previous session's losses as investors scaled back expectations of near-term Reserve Bank of Australia policy easing. The move followed data showing monthly CPI rising 3% in August, the fastest pace in a year, dampening the case for immediate rate cuts. Meanwhile, the US dollar index steadied near 97.5 after its recent rebound, with traders cautious ahead of weekly jobless claims and Friday's PCE price index. Mounting concerns over labor market weakness and inflationary pressures from tariffs have kept markets on edge, with the upcoming PCE release expected to play a decisive role in shaping the Federal Reserve's next steps.

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