Investing.com - The dollar edged higher against the euro and the yen on Wednesday as investors awaited the conclusion of the Federal Reserve’s two-day policy meeting later in the trading day
The Fed was widely expected to announce a third reduction in the monthly pace of its bond purchases from $65 billion to $55 billion at the conclusion of its monthly meeting later Wednesday, the first with Janet Yellen at the helm.
The central bank was also expected to confirm that recent softness in U.S. economic reports was due to severe winter weather.
The dollar pushed higher against the yen, with USD/JPY rising 0.13% to 101.55, holding above last week’s lows of 101.19.
The yen shrugged off data on Wednesday showing that Japan reported a larger-than-forecast trade deficit in February, as spiraling energy imports offset import costs.
EUR/USD slid 0.13% to 1.3915, not far from last week’s two-and-a-half year peaks of 1.3966.
The dollar was lower against the pound, with GBP/USD rising 0.18% to 1.6618, after data on Wednesday indicated that the recovery in the U.K. labor market was still continuing.
The Office for National Statistics reported that rate of unemployment remained unchanged at 7.2% in the three months to January, in line with expectations.
The number of people claiming unemployment benefits fell by 34,600 last month, the ONS said, compared to expectations for a decline of 25,000.
Separately, the minutes of the Bank of England’s March meeting indicated that the economic recovery in the U.K. is broadening, but still has some way to go before it is sustainable. The minutes also noted differences between officials over how much slack there is in Britain's labor market.
Elsewhere, USD/CHF climbed 0.17% to 0.8744, holding above last week’s two-and-a-half year lows of 0.8699.
The Australian dollar moved lower, with AUD/USD losing 0.25% to trade at 0.9100, while NZD/USD dipped 0.06% to 0.8614, down slightly from Tuesday’s 10-month peaks of 0.8639.
The greenback rose to six-week highs against the Canadian dollar, with USD/CAD climbing 0.42% to 1.1183.
The loonie, as the Canadian dollar is also known, remained under pressure after Bank of Canada Governor Stephen Poloz said Tuesday that the bank could have to cut rates if inflation remains low.
Data released on Wednesday showed that Canadian wholesale sales rose 0.8% in January, undershooting forecasts for a 1% gain.
The U.S. dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, edged up 0.11% to 79.61, not far from the four-and-a-half month trough of 79.37 reached last Wednesday.