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Dollar holds steady close to 14-month peak ahead of Fed statement

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Investing.com -

Investing.com - The dollar remained close to 14-month highs against the other major currencies on Wednesday, as investors awaited the outcome of the Federal Reserve's two-day policy meeting later in the day.

USD/JPY rose 0.20% to trade near six-year highs at 107.32.

The dollar remained broadly supported by expectations for an early hike in U.S. interest rates, while expectations for continued monetary stimulus in European and Japan pressured the euro and the yen lower.

The Fed was expected to cut its asset purchase program by another $10 billion later Wednesday, which would keep it on track for winding up the program in October, and to start raising interest rates sometime in mid-2015.

The euro was little changed against the dollar, still trading within close distance of a 14-month low with EUR/USD at 1.2963 after Eurostat said consumer price inflation rose 0.4% last month, up from a preliminary estimate of 0.3%. Euro zone inflation rose by 0.4% in July.

The rate remains firmly below the European Central Bank's target of near but just below 2%.

Month-over-month, consumer prices inched up 0.1% last month, in line with forecasts and following a 0.7% decline in July.

Core CPI, which excludes food, energy, alcohol, and tobacco costs rose 0.9% in August, meeting forecasts and unchanged from an initial estimate.

GBP/USD added 0.15% to 1.6300, as investors eyed the upcoming referendum on Scottish independence, scheduled on Thursday.

Earlier Wednesday, data showed that the U.K. claimant count fell by 37,200 last month, compared to expectations for a decline of 30,000 people. July's figure was revised to a drop of 37,400 people from a previously reported decline of 33,600.

The report also showed that the rate of unemployment in the U.K. declined to 6.2% in the three months to July, the lowest level since December 2008, compared to expectations for a reading of 6.3% and down from 6.4% in the three months to June.

Separately, the minutes of the Bank of England's September policy meeting showed that members votes unanimously to keep the asset puschase facility program on hold.

However, members Martin Weale and Ian McCafferty voted for the second consecutive time to raise interest rates to 0.75% from a record-low 0.5%.

USD/CHF edged up 0.16% near one-year highs at 0.9340.

Elsewhere, AUD/USD slid 0.30% to 0.9067 and NZD/USD fell 0.27% to 0.8178, while USD/CAD eased 0.07% to 1.0962.

The US Dollar Index, which tracks the performance of the greenback versus a basket of six other major currencies, held steady at 84.22, not far from last week's 14-month peak of 84.65.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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