Investing.com - The dollar was steady against the yen on Wednesday, and rose to four-year highs against the Canadian dollar after the Bank of Canada indicated that it is growing more concerned over the low inflation outlook.
USD/JPY edged up 0.04% to 104.33, up from the lows of 103.97 struck earlier in the trading day.
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 highs of 1.3580, and was last up 0.02% to 1.3563.
Meanwhile, GBP/USD hit 1.6565, the highest since January 2 and was last up 0.54% to 1.6564.
Sterling strengthened after official data showed that the U.K. unemployment rate fell to 7.1% in the three months to November, to stand just above the 7% level the Bank of England has said is its threshold for considering raising interest rates from their current record low of 0.5%.
Analysts had expected the jobless rate to fall to 7.3% from 7.4% previously.
The dollar was little changed against the Swiss franc, with USD/CHF dipping 0.02% to 0.9099.
The dollar rose to the highest level since September 2009 against the Canadian dollar. USD/CAD hit 1.1065 and was last up 0.82% to 1.1058.
The loonie, as the Canadian dollar is known, slumped after the BoC said it expects inflation to remain well below the 2% target for some time, and consequently the downside risks to inflation have grown in importance.
The bank said that the path of the next rate move would depend on economic data.
The BoC maintained the target for the overnight rate at 1% on Wednesday.
The Australian dollar was stronger against its U.S. counterpart, with AUD/USD advancing 0.56% to 0.8854, recovering from the three-and-a-half year lows of 0.8755 struck on Monday.
Data 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 dipped 0.06% to trade at 0.8310.
The U.S. dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, edged down 0.01% to 81.20.