Investing.com - The dollar edged higher against against the other major currencies on Wednesday, as investors remained cautious ahead of the Federal Reserve's highly-anticipated policy statement due on Thursday.
The dollar was steady against the yen, with USD/JPY at 120.41.
Investors remained cautious amid uncertainty over whether the Fed would hike short term interest rates for the first time in almost a decade on Thursday.
An increase in interest rates would boost the greenback by making it more attractive to yield-seeking investors.
Data on Tuesday showing that U.S. retail sales rose 0.4% in August after a 0.6% increase in July lent support to the view that the economic recovery is on track and offset data showing that manufacturing output slowed last month.
Market participants were looking ahead to U.S. data on consumer inflation due out later Wednesday.
Recent U.S. data has indicated that inflation is still weak, due to low oil prices and the stronger dollar, even as the labor market staged a strong recovery and the economy posted five consecutive quarters of growth.
Fed Chair Janet Yellen has said that an interest rate increase is data dependent but has also indicated that she expects to begin raising rates before the end of the year.
The dollar was higher against the euro, with EUR/USD sliding 0.31% to 1.1236.
Final data on Wednesday showed that the euro zone consumer price index was flat in August, compared to expectations for a 0.6% fall.
Elsewhere, the dollar was lower against the pound, with GBP/USD up 0.49% at 1.5418 and fractionally higher against the Swiss franc, with USD/CHF edging up 0.08% at 0.9747.
The Office for National Statistics earlier reported that the U.K. claimant count rose by 1,200 last month, compared to expectations for a decline of 5,000.
Average earnings, including bonuses rose by 2.9% in the three months to July from a year earlier after a 2.6% increase in July, ahead of forecasts of 2.5%.
The report also showed that the U.K. rate of unemployment ticked down to 5.6% in the three months to July, better than forecasts for 5.6%.
The Australian dollar was stronger, with AUD/USD rising 0.29% to 0.7162, while NZD/USD slipped 0.14% to 0.6346.
USD/CAD fell 0.10% to trade at 1.3235.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was up 0.13% at 95.89.