Investing.com - The dollar was lower against the safe haven yen on Wednesday, and the euro slid as concerns over global emerging markets hit investor sentiment ahead of the Federal Reserve’s policy statement later in the trading day.
USD/JPY was down 0.67% to 102.24 after rising to session highs of 103.45 earlier.
The U.S. central bank was expected to roll back its asset purchase program by another $10 billion, to $65 billion per month. The central bank announced the first cut to its stimulus program in December.
A renewed selloff in emerging market currencies hit investor confidence after South Africa’s central bank hiked interest rates to 5.5% from 5%, in a bid to arrest the steep decline in the rand.
The rand initially rose against the dollar, before tumbling to five year lows.
Turkey’s lira also weakened against the dollar, falling back to levels seen before Tuesday’s night’s dramatic rate hike by Turkey’s central bank.
Emerging markets economies have been hard hit in recent sessions by worries over the impact of cuts in Fed stimulus and concerns over a possible slowdown in China.
EUR/USD was down 0.19% to 1.3644. The pair fell to session lows earlier after European Central Bank council member Christian Noyer said any rise in the euro's exchange rate would be negative.
Elsewhere, GBP/USD slid 0.16% to 1.6554, while USD/CHF was down 0.14% to 0.8959.
The Australian dollar was weaker against the U.S. dollar, with AUD/USD down 0.31% to 0.8750, after rising as high as 0.8826 following Turkey’s rate hike.
NZD/USD was up 0.11% to 0.8266. Demand for the kiwi continued to remain supported ahead of Thursday’s reserve bank policy meeting, with markets split on whether the central bank will raise rates at this meeting or in March.
The Canadian dollar was trading close to four-and-a-half-year lows against the U.S. dollar, with USD/CAD edging down 0.07% to 1.1144. The Canadian dollar remained under pressure amid expectations that rates will remain on hold for some time.
The U.S. dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, inched up 0.04% to 80.68.