Investing.com - The dollar traded higher against many major global currencies on Wednesday as investors bought and sold before a two-day Federal Reserve monetary policy meeting begins later in the day.
Many investors are expecting the Fed to announce plans to stimulate the economy in a way that would weaken the dollar, though the greenback rose as investors waited for a formal announcement.
In Asian trading on Wednesday, EUR/USD was up 0.01% at 1.2856.
The U.S. reported recently the economy created a net 96,000 nonfarm payroll jobs in August, sluggish data that served as a tipping point that will nudge the Federal Reserve to roll out a third round of quantitative easing.
Under quantitative easing, the Fed buys assets such as Treasury holdings or mortgage-backed securities held by banks, pumping the economy full of fresh liquidity in a way that pushes down interest rates to encourage investing and hiring.
Such accommodative policies tend to weaken the dollar by design, thought the greenback held firm as investors looked towards Germany, where a court ruling is due out later Wednesday on whether the eurozone's permanent bailout fund, the European Stability Mechanism, is compatible with German law.
The European Central Bank needs Germany's participation to push through its recently announced sovereign bond purchasing program, which aims to lower borrowing costs in debt-ridden periphery countries.
Nerves were on edge ahead of the court's announcement, which bolstered the dollar despite possible Federal Reserve stimulus.
Elsewhere in the U.S. earlier, Moody's Investors Service said the country could lose its coveted triple-A rating if it doesn't find a way to narrow deficits and pay down debts.
At the end of 2012, a series of tax cuts and other benefits expire at the same time preprogrammed cuts to government spending take effect, and the combination of the two could send the U.S. into a recession in 2013, according to studies from the nonpartisan Congressional Budget Office.
U.S. lawmakers have been largely unwilling to address tax and spending issues in an election year, but some have suggested convening early in 2013 and dealing with the combination of tax hikes and spending cuts occurring simultaneously — known as the fiscal cliff — on a retroactive basis.
The U.S. government, meanwhile, revealed that the country's trade deficit widened less than expected in July.
The U.S. trade deficit widened to a seasonally adjusted USD42.0 billion from a downwardly revised deficit of USD41.9 billion in June.
Analysts had expected the U.S. trade deficit to widen to USD44.0 billion.
Meanwhile in Japan, the country's tertiary industry activity index fell more than expected in July, according to official data.
The Japanese tertiary industry activity index fell to a seasonally adjusted -0.8%, from 0.2% in the preceding month whose figure was revised up from 0.1%.
Analysts had expected Japanese tertiary industry activity index to fall -0.4% last month.
Also in Japan, the country's corporate goods price index fell less than expected in August.
The Bank of Japan reported that the country's Corporate Goods Price Index fell to a seasonally adjusted annual rate of -1.8%, from -2.1% in the preceding month.
Analysts had expected Japan’s Corporate Goods Price Index to fall -1.9% last month.
The greenback, meanwhile, was down against the pound, with GBP/USD trading up 0.01% at 1.6072.
The dollar was up against the yen, with USD/JPY trading up 0.14% at 77.87, and down against the Swiss franc, with USD/CHF trading down 0.03% at 0.9388.
The dollar was down against its cousins in Canada, Australia and New Zealand, with USD/CAD trading down 0.07% at 0.9725, AUD/USD up 0.32% at 1.0468 and NZD/USD trading up 0.24% at 0.8192.
The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was up 0.01% at 80.01.
Later Wednesday, the U.S. government will release official data on import prices, followed by a government report on crude oil stockpiles.
Many investors are expecting the Fed to announce plans to stimulate the economy in a way that would weaken the dollar, though the greenback rose as investors waited for a formal announcement.
In Asian trading on Wednesday, EUR/USD was up 0.01% at 1.2856.
The U.S. reported recently the economy created a net 96,000 nonfarm payroll jobs in August, sluggish data that served as a tipping point that will nudge the Federal Reserve to roll out a third round of quantitative easing.
Under quantitative easing, the Fed buys assets such as Treasury holdings or mortgage-backed securities held by banks, pumping the economy full of fresh liquidity in a way that pushes down interest rates to encourage investing and hiring.
Such accommodative policies tend to weaken the dollar by design, thought the greenback held firm as investors looked towards Germany, where a court ruling is due out later Wednesday on whether the eurozone's permanent bailout fund, the European Stability Mechanism, is compatible with German law.
The European Central Bank needs Germany's participation to push through its recently announced sovereign bond purchasing program, which aims to lower borrowing costs in debt-ridden periphery countries.
Nerves were on edge ahead of the court's announcement, which bolstered the dollar despite possible Federal Reserve stimulus.
Elsewhere in the U.S. earlier, Moody's Investors Service said the country could lose its coveted triple-A rating if it doesn't find a way to narrow deficits and pay down debts.
At the end of 2012, a series of tax cuts and other benefits expire at the same time preprogrammed cuts to government spending take effect, and the combination of the two could send the U.S. into a recession in 2013, according to studies from the nonpartisan Congressional Budget Office.
U.S. lawmakers have been largely unwilling to address tax and spending issues in an election year, but some have suggested convening early in 2013 and dealing with the combination of tax hikes and spending cuts occurring simultaneously — known as the fiscal cliff — on a retroactive basis.
The U.S. government, meanwhile, revealed that the country's trade deficit widened less than expected in July.
The U.S. trade deficit widened to a seasonally adjusted USD42.0 billion from a downwardly revised deficit of USD41.9 billion in June.
Analysts had expected the U.S. trade deficit to widen to USD44.0 billion.
Meanwhile in Japan, the country's tertiary industry activity index fell more than expected in July, according to official data.
The Japanese tertiary industry activity index fell to a seasonally adjusted -0.8%, from 0.2% in the preceding month whose figure was revised up from 0.1%.
Analysts had expected Japanese tertiary industry activity index to fall -0.4% last month.
Also in Japan, the country's corporate goods price index fell less than expected in August.
The Bank of Japan reported that the country's Corporate Goods Price Index fell to a seasonally adjusted annual rate of -1.8%, from -2.1% in the preceding month.
Analysts had expected Japan’s Corporate Goods Price Index to fall -1.9% last month.
The greenback, meanwhile, was down against the pound, with GBP/USD trading up 0.01% at 1.6072.
The dollar was up against the yen, with USD/JPY trading up 0.14% at 77.87, and down against the Swiss franc, with USD/CHF trading down 0.03% at 0.9388.
The dollar was down against its cousins in Canada, Australia and New Zealand, with USD/CAD trading down 0.07% at 0.9725, AUD/USD up 0.32% at 1.0468 and NZD/USD trading up 0.24% at 0.8192.
The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was up 0.01% at 80.01.
Later Wednesday, the U.S. government will release official data on import prices, followed by a government report on crude oil stockpiles.