Investing.com - The dollar was steady against the euro and the yen on Wednesday, while the Australian dollar moved sharply higher after fourth quarter inflation data came in stronger-than-expected.
USD/JPY dipped 0.01% to 104.28, up from the lows of 103.97 struck earlier in the session.
The yen briefly moved higher after the Bank of Japan kept monetary policy unchanged following its monthly policy meeting and maintained its assessment that Japan's economy "has continued to recover moderately."
Demand for the dollar continued to be supported by expectations for a reduction to the Federal Reserve’s quantitative easing program at its policy meeting next week to USD65 billion from the current USD75 billion.
EUR/USD touched lows of 1.3535, and was last down 0.12% to 1.3543.
GBP/USD slipped 0.08% to 1.6464 ahead of what would be closely watched data on the U.K. unemployment rate and the minutes of the Bank of England’s latest meeting.
The dollar edged higher against the Swiss franc, with USD/CHF inching up 0.09% to 0.9108.
The Australian dollar was stronger against its U.S. counterpart, with AUD/USD advancing 0.91% to 0.8886, recovering from the three-and-a-half year low of 0.8755 struck on Monday.
Data released on Wednesday showed that Australian consumer prices rose 0.8% in the three months to December and were up 2.7% on a year-over-year basis. Market expectations had been for a 0.5% quarterly increase and an annual gain of 2.5%.
NZD/USD was up 0.14% to trade at 0.8326.
Elsewhere, USD/CAD dipped 0.08% to 1.0959, not far from Tuesday’s four-year peak of 1.1017. The loonie, as the Canadian dollar is also known, remained under pressure amid expectations that the Bank of Canada would stick to its dovish stance on rates at Wednesday’s policy meeting.
The U.S. dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was up 0.10% to 81.29.