The U.S. dollar struggled to find a direction on Wednesday as traders and investors were jittery before the Federal Open Market Committee’s decision in the U.S. later in the day.
Meanwhile, the Australian dollar fell sharply, as slow inflation data increased expectations for a rate cut in Australia as early as next week.
The dollar fell against the Japanese yen to trade at ¥120.34, down 0.06%, compared to ¥120.47 late Tuesday in New York.
The dollar declined
against the euro, which traded at $1.1063 compared with $1.1049 on
Tuesday.
It was also almost unchanged against the pound, buying $1.5296 compared with $1.5300 late Tuesday.
The U.S. Federal Reserve wraps up its two-day policy meeting later
Wednesday and investors find themselves on the sidelines.
Daisaku Ueno, chief FX strategist at Mitsubishi UFJ Morgan Stanley said he sees investors taking a wait-and-see mode before the Fed decision and the Bank of Japan policy-setting meeting due on Friday.
In the stock market, European shares were higher Wednesday with London's FTSE trading up 0.44% after sliding at the beginning of the session. Standing out was a 21% slide in Meggitt PLC shares after the aerospace, defense and energy engineering group warned on full-year earnings and said it may cut up 300 jobs to reduce costs. In Germany, DAX was up 0.70% while Italy's FTSE MIB traded higher 0.96% and France's CAC added 0.50%.
The Fed’s statement is due at 2 p.m. Eastern Time.
Forty-six economists polled by Reuters
unanimously expect the Fed on Wednesday to keep its target rate for
overnight lending between banks steady at 0 percent to 0.25 percent, as
it has since 2008 when it embarked on an effort to nurse the economy
back from a severe recession. A
narrow majority of the economists expect a rate increase in December.
Financial markets assign only a 30 percent chance for a December hike
and a 54 percent chance for such a move in March.
