Investing.com - The dollar slid lower against the other major currencies on Wednesday as investors looked ahead to policy decisions from central banks in both the U.S. and Japan.
USD/JPY eased 0.13% to 111.16, moving further back from the three-week highs of 1118.86 set on Monday.
The Federal Reserve was to wrap up its two-day policy meeting later Wednesday.
The Fed, which hiked rates for the first time in almost a decade in December, is expected to hold steady for now, but investors will be looking at the bank’s rate statement for indications on the likelihood of a June interest rate increase.
Investors were also looking ahead to the conclusion of the Bank of Japan’s policy meeting on Thursday amid heightened expectations for fresh easing measures.
The yen fell 2.1% against the dollar on Friday after Bloomberg reported that the BoJ could expand the negative interest rate policy it put in place in January at the conclusion of its rate review.
Some investors believe the bank will not roll out further easing measures as it continues to assess the impact of negative rates.
But most analysts expect the BoJ to cut its forecasts for growth and inflation as the strong yen and a severe earthquake this month which has disrupted supply chains cloud the economic outlook.
The dollar was lower against the euro, with EUR/USD rising 0.26% to 1.1324.
The pound remained close to three month highs, with GBP/USD last at 1.4593 as concerns over a British exit from the European Union, or Brexit, abated.
The Australian dollar tumbled after data showing that consumer prices unexpectedly fell in the first quarter as lower oil prices weighed.
The weak data was seen as increasing the chances of a rate cut from the country’s central bank at its upcoming policy meeting next week.
AUD/USD was last down 1.76% at two-week lows of 0.7611.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was down 0.14% at 94.31.