Investing.com - The dollar pushed higher on Wednesday, easing back from multi-week lows hit in the previous session after comments by the Trump administration indicated that Washington may increasingly focus on the value of the dollar in relation to trade.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was up 0.11% to 99.64.
On Tuesday, the index fell to lows of 99.40, the weakest level since November 14 and ended the month with a loss of 2.75%.
The euro surged on Tuesday after Donald Trump’s top trade adviser accused Germany of currency exploitation, saying it is using a “grossly undervalued” euro to exploit the U.S. and its trading partners.
In separate remarks, President Trump criticized Japan and China, saying they devalued their currencies to the disadvantage of the U.S.
The remarks indicated that the dollar exchange rate could have a prominent role to play in Trump's 'America First' agenda.
The dollar climbed against the yen, with USD/JPY rising 0.57% to 113.44, up from Tuesday’s lows of 112.07.
The euro was little changed against the dollar at 1.0790, not far from Tuesday’s peaks of 1.0811, the strongest level since December 8.
Investors were looking ahead to the outcome of the Federal Reserve’s latest policy meeting later Wednesday.
The Fed isn’t expected to raise interest rates amid ongoing uncertainty over Trump’s controversial and protectionist policies, but investors are keen to hear how it views the economy and the future path of interest rates.
Sterling was steady against the dollar, with GBP/USD at 1.2576 as investors looked ahead to the Bank of England’s upcoming policy meeting and inflation report on Thursday.
The BoE is expected to revise up its outlook for inflation and growth, but uncertainty over Brexit is expected to cloud the outlook.