Investing.com - The euro edged lower against the dollar on Wednesday as investors looked ahead to the Federal Reserve’s policy announcement later in the trading day.
EUR/USD dipped 0.08% to 1.3923 and was trading in a range of 1.3905 and 1.3935, not far from the two-and-a-half year peaks of 1.3966 struck last Thursday.
The pair was likely to find support at 1.3800 and resistance at 1.3945.
The Fed was widely expected to announce a third reduction in the monthly pace of its bond purchases from $65 billion to $55 billion at the conclusion of its monthly meeting later Wednesday, the first with Janet Yellen at the helm. The central bank was also expected to confirm that recent softness in U.S. economic reports was due to severe winter weather.
Data released on Tuesday indicated that the economic recovery in the U.S. remains sluggish. The annual rate of inflation slowed to 1.1% in February from 1.6% in January. A separate report showed that building permits rose more than expected last month following a steep drop in January, but housing starts slipped.
The euro was fractionally higher against the yen, with EUR/JPY edging up 0.05% to 141.38.
The yen shrugged off data on Wednesday showing that Japan reported a larger-than-forecast trade deficit in February, as spiraling energy imports offset import costs.
Elsewhere, the dollar edged higher against the yen, with USD/JPY rising 0.11% to 101.55, holding above last week’s trough of 101.19.