Investing.com - The euro advanced against the dollar on Wednesday as investors awaited the Federal Reserve’s statement on monetary policy, due later in the trading day.
EUR/USD was up 0.25% to 1.3579, from 1.3545 late Tuesday.
The pair was likely to find support at 1.3502, the four-month low hit earlier this month and resistance at 1.3600.
The dollar drifted lower against the euro as market watchers waited for the Fed’s Federal Open Market Committee to announce its latest monetary policy decision, followed by a press conference with Fed Chair Janet Yellen.
The Fed was expected to cut its asset purchase 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.
Data on Tuesday showed 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.
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%.
The US Dollar Index, which tracks the performance of the greenback versus a basket of six other major currencies, was down 0.14% to 80.60 from 80.72 late Tuesday.
Elsewhere, the dollar edged lower against the yen, with USD/JPY dipping 0.06% to 102.08.