Investing.com - The dollar was lower against a basket of the other major currencies on Wednesday ahead of an expected interest rate hike by the Federal Reserve at the conclusion of its policy meeting later in the trading day.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was down 0.25% to 101.37.
The Fed was to make its latest monetary policy announcement at 2:00PM ET (18:00GMT), with futures traders pricing in around a 90% chance of a hike, according to Investing.com’s Fed Rate Monitor Tool.
With a rate increase seen as a near certainty investors were awaiting fresh cues from the Fed on the expected pace of rate hikes this year.
Fed officials previously projected three rate hikes in 2017, but that might move up to four, amid signs of a recent uptick in inflation and continued strength in the jobs market.
The dollar was a touch lower against the yen, with USD/JPY edging down 0.07% to 114.67, holding below last Friday’s seven-week highs of 115.49.
The Bank of Japan began a two-day policy meeting on Wednesday and was widely expected to keep monetary policy on hold.
The euro pushed higher, with EUR/USD rising 0.24% to 1.0629 as investors continued to monitor political developments in Europe.
Wednesday's Dutch election is being closely watched as it is the first of three crucial euro zone elections this year.
Far-right leader Geert Wilders is running against Prime Minister Mark Rutte, who has said the election is an opportunity for voters to reject populism.
Sterling gained ground after falling to eight-week lows in the previous session as Brexit fears weighed, with GBP/USD rising 0.66% to 1.2228.
Parliament gave its approval to Prime Minister Theresa May’s Brexit bill on Monday, giving her the power to formally trigger article 50 of the Lisbon Treaty to launch divorce proceedings with the European Union
Scotland’s push for a new independence referendum deepened political uncertainty over Brexit.
The pound was also higher against the euro, with EUR/GBP dropping 0.38% to 0.8693.