Investing.com - The dollar held steady against the other major currencies on Wednesday, as investors remained cautious ahead of the Federal Reserve’s upcoming policy decision due later in the day.
EUR/USD added 0.16% to 1.1003.
While most investors expect the Fed to leave its monetary policy unchanged this week, they were hoping for hints on the timing of future rate hikes.
The pound slipped lower, with GBP/USD down 0.27% at 1.3098.
The U.K. Office for National Statistics earlier reported that gross domestic product rose 0.6% in the three months to June, above forecasts for growth of 0.4%. Year-over-year, U.K. economic growth expanded 2.2% in the second quarter, also above the forecast for an expansion of 2.0%.
But the data failed to boost optimism over the U.K. economy as it is the final measure of growth in the run-up to the U.K.’s June 23 referendum that resulted in Britain’s decision to leave the European Union.
According to a Bloomberg survey released on Wednesday, consensus expects the U.K. to contract by 0.1% in the third quarter.
Meanwhile, USD/JPYclimbed 0.75% to trade at 105.42, off the one-and-a-half month lows of 103.98 hit on Tuesday, while USD/CHF held steady at 0.9931.
The yen weakened following reports Prime Minister Shinzo Abe and his government will compile a stimulus package of nearly 28 trillion yen, or $265.3 billion, to prop up Japan's flagging economy. That would be bigger than earlier reports of a possible headline figure of around 20 trillion yen.
Market players are also looking ahead to the Bank of Japan’s policy meeting later this week. The BOJ is widely expected to ease policy further at the conclusion of its meeting on Friday, which could include a rate cut deeper into negative territory and additional asset purchases.
The Australian and New Zealand dollars were lower, with AUD/USD down 0.28% at 0.7482 and with NZD/USD edging down 0.16% to 0.7043.
Earlier Wednesday, the Australian Bureau of Statistics said the consumer price index rose 0.4% in the second quarter, in line with expectations and after a 0.2% fall in the three months to March.
Year-on-year, consumer prices rose 1.0% in the last quarter, compared to expectations for an increase of 1.1%.
Elsewhere, USD/CAD was little changed at 1.3196, close to Tuesday’s four-month peak of 1.3245.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was steady at 97.23, hovering close to Monday’s four-month high of 97.62.