Investing.com - The dollar drifted lower against the euro on Wednesday as investors avoided the greenback ahead of the Federal Reserve's statement on monetary policy later in the day.
In U.S. trading,EUR/USD was up 0.19% at 1.3572, up from a session low of 1.3542 and off a high of 1.3584.
The pair was likely to find support at 1.3512, Thursday's low, and resistance at 1.3677, the high from June 6.
Investors waited for the Fed to announce its latest monetary policy decision followed by a press conference with Fed Chair Janet Yellen.
The U.S. central bank was expected to cut its bond-buying program by another $10 billion to $35 billion, and investors were also awaiting indications on the future path of interest rates and the Fed’s latest economic forecasts.
While many investors expect the Fed to wind down its bond-buying program this year, the time frame between when that stimulus program ends and when benchmark interest rates rise remains up in the air.
Data on Tuesday revealed that U.S. consumer prices rose 0.4% from a month earlier in May, bringing the annual rate of inflation to 2.1%. It was the fastest monthly increase in inflation in more than a year, beating forecasts of 0.2%.
The uptick in inflation indicated that the economic recovery is deepening and boosted expectations for a more hawkish stance on monetary policy from the Fed, though uncertainty softened the dollar.
Meanwhile, data on Wednesday showed that the U.S. current account deficit widened to $111.2 billion in the first quarter of this year, the largest in 18 months. Exports fell by 1.3% during the quarter, while imports rose by 1.5%.
Elsewhere, the euro was up against the pound, with EUR/GBP up 0.29% at 0.8009, and up against the yen, with EUR/JPY up 0.20% at 138.66.
On Thursday, euro area finance ministers are to hold meeting in Brussels.
The U.S. is to publish the weekly report on initial jobless claims as well as a report on manufacturing activity in the Philadelphia region.