Investing.com - The dollar edged lower against a basket of other major currencies on Wednesday, as investors anticipated the outcome of the latest Federal Reserve meeting later in the trading day, while the pound weakened after Bank of England minutes tempered expectations for a U.K. rate hike.
USD/JPY was at 102.19, after rising as high as 102.31 earlier.
The dollar remained supported after official Tuesday on Tuesday showed that U.S. consumer prices rose 0.4% in May from a month earlier, bringing the annual rate of inflation to 2.1%.
It was the fastest monthly increase in inflation in more than a year, beating forecasts of 0.2%.
The uptick in inflation indicated that the economic recovery is deepening and boosted expectations for a more hawkish stance on interest rates from the Fed.
Investors were looking ahead to the bank’s post-policy meeting press conference with Chair Janet Yellen later Wednesday, as they awaited fresh indications on the timing of possible interest rate increases.
The Fed was expected to cut its asset purchase program by another $10 billion, but is not expected to raise borrowing costs until mid-2015.
Meanwhile, GBP/USD slipped 0.17% to 1.6932, off the five year peak of 1.7011 set on Monday.
Sterling turned lower after the minutes of the BoE’s June meeting said that while the case for a rate increase is becoming more balanced more slack still needs to be absorbed from the economy.
The minutes showed that the BoE’s monetary policy committee voted unanimously to leave interest rates on hold at their record low of 0.5% this month.
Elsewhere, EUR/USD rose 0.15% to 1.3565 and USD/CHF dipped 0.11% to trade at 0.8984.
The Australian and New Zealand dollars edged higher, with AUD/USD easing up 0.10% to 0.9345 and NZD/USD adding 0.16% to trade at 0.8671. USD/CAD was flat at 1.0860.
The US Dollar Index, which tracks the performance of the greenback versus a basket of six other major currencies, edged down to 80.67 from 80.72 late Tuesday.