Investing.com - The dollar extended gains against the yen on Wednesday as investors waited to see if the Federal Reserve would start to reduce monetary stimulus at the outcome of its final policy meeting of the year.
During U.S. morning trade, USD/JPY hit session highs of 103.22 and was last up 0.53% to 103.20, not far from five year peaks of 103.91 struck last Friday.
Investors remained on edge ahead of the Fed announcement, with some expecting the bank to make a small reduction in the pace of its USD85 billion-a-month asset purchase program.
However, many believe that the bank will wait until early next year to start rolling back stimulus, despite recent indications the U.S. economic recovery is deepening.
Data released on Wednesday showed that U.S. housing starts rose to the highest level in nearly six years in November.
U.S. housing starts rose to 1.09 million units, the Commerce Department said, from 0.89 million in October, compared to expectations for an increase to 0.95 million units.
Building permits in the U.S. fell 3.1% to 1.01 million units in November, from 1.04 million units the previous month. Analysts had expected building permits to drop 4.7% last month to 0.99 million units.
The euro was little changed against the dollar, with EUR/USD dipping 0.06% to 1.3757.
The euro showed little reaction after the Ifo German business climate index rose to a 20-month high of 109.5 in December, in line with forecasts and up from 109.3 in November.
The pound was sharply higher against the dollar, with GBP/USD up 0.82% to 1.6396.
Sterling rallied after data on Wednesday showed that the U.K. unemployment rate unexpectedly fell to a four-and-a-half year low of 7.4% in the three months to October, fuelling hopes that the Bank of England will raise interest rates ahead of other central banks.
The dollar pulled away from two year lows against the Swiss franc, with USD/CHF rising 0.25% to 0.8871, close to the lows of 0.8839 struck last Wednesday.
The greenback rose to three-and-a-half month highs against the Australian dollar, with AUD/USD down 0.31% to 0.8871.
Australia’s dollar remained under pressure after central bank Governor Glenn Stevens reiterated Wednesday that an exchange rate above USD0.90 is not suitable for the economy.
The U.S. dollar was also higher against its New Zealand and Canadian counterparts, with NZD/USD down 0.48% to 0.8233 and USD/CAD rising 0.51% to 1.0665.
The U.S. dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, edged up 0.03% to 80.23.
During U.S. morning trade, USD/JPY hit session highs of 103.22 and was last up 0.53% to 103.20, not far from five year peaks of 103.91 struck last Friday.
Investors remained on edge ahead of the Fed announcement, with some expecting the bank to make a small reduction in the pace of its USD85 billion-a-month asset purchase program.
However, many believe that the bank will wait until early next year to start rolling back stimulus, despite recent indications the U.S. economic recovery is deepening.
Data released on Wednesday showed that U.S. housing starts rose to the highest level in nearly six years in November.
U.S. housing starts rose to 1.09 million units, the Commerce Department said, from 0.89 million in October, compared to expectations for an increase to 0.95 million units.
Building permits in the U.S. fell 3.1% to 1.01 million units in November, from 1.04 million units the previous month. Analysts had expected building permits to drop 4.7% last month to 0.99 million units.
The euro was little changed against the dollar, with EUR/USD dipping 0.06% to 1.3757.
The euro showed little reaction after the Ifo German business climate index rose to a 20-month high of 109.5 in December, in line with forecasts and up from 109.3 in November.
The pound was sharply higher against the dollar, with GBP/USD up 0.82% to 1.6396.
Sterling rallied after data on Wednesday showed that the U.K. unemployment rate unexpectedly fell to a four-and-a-half year low of 7.4% in the three months to October, fuelling hopes that the Bank of England will raise interest rates ahead of other central banks.
The dollar pulled away from two year lows against the Swiss franc, with USD/CHF rising 0.25% to 0.8871, close to the lows of 0.8839 struck last Wednesday.
The greenback rose to three-and-a-half month highs against the Australian dollar, with AUD/USD down 0.31% to 0.8871.
Australia’s dollar remained under pressure after central bank Governor Glenn Stevens reiterated Wednesday that an exchange rate above USD0.90 is not suitable for the economy.
The U.S. dollar was also higher against its New Zealand and Canadian counterparts, with NZD/USD down 0.48% to 0.8233 and USD/CAD rising 0.51% to 1.0665.
The U.S. dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, edged up 0.03% to 80.23.