Investing.com - The dollar was little changed against the other major currencies on Wednesday as investors awaited the outcome of the Federal Reserve meeting later in the day for further indications on the direction of monetary policy this year.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was steady at 99.1, holding well below last Thursday’s seven-week highs of 99.95.
The U.S. central bank is expected to keep interest rates on hold at the conclusion of its two-day policy meeting later Wednesday after raising interest rates for the first time in almost a decade in December.
Investors were looking to the Fed policy statement for any indication that the bank is considering slowing the path of interest rate increases this year after recent global financial market turmoil.
The dollar edged lower against the yen, with USD/JPY edging down 0.14% to 118.26.
The pair remained rangebound ahead of the Fed announcement and the conclusion of the of the Bank of Japan meeting on Friday.
Most analysts are expecting no changes to monetary policy, but recent weakness in economic reports, as well as comments by BoJ officials have fueled expectations for more easing this year.
The euro dipped against the dollar, with EUR/USD easing 0.07% to 1.0862.
The Australian dollar was boosted as slightly better-than-expected domestic inflation data was seen as diminishing the chances of a rate cut next week.
AUD/USD rose 0.34% to 0.7029, off overnight lows of 6993.
The New Zealand dollar remained under pressure ahead of the Reserve Bank of New Zealand’s rate review on Thursday, with NZD/USD at 0.6498.
The RBNZ is expected to keep rates on hold, but to indicate that further rate cuts may be necessary.