The U.S. dollar edged up against a currency basket on Wednesday ahead of the conclusion of the Federal Reserve’s latest policy meeting later in the day, while the risk sensitive Australian dollar was pressured lower by renewed trade concerns.
The U.S. dollar index, which measures the greenback’s strength against a basket of six major currencies, inched up 0.10% to 94.42 by 04:07 AM ET (08:07 GMT).
The Fed was not expected to announce any change to interest rates following its meeting later Wednesday, with an increase more likely in September.
Data on Tuesday showed that U.S. consumer spending posted solid gains in June, while inflation rose moderately, underlining the view that the economy is strengthening.
The euro was almost flat for the day, with EUR/USD at 1.1688.
The dollar was higher against the yen, with USD/JPY rising 0.22% to 112.12.
The yen remained on the back foot after the Bank of Japan pledged to keep interest rates very low for the time being after its latest policy meeting on Tuesday. It also made small adjustments to its asset purchase program to make it more flexible, rather than more drastic moves that some market participants had anticipated.
The pound edged lower, with GBP/USD dipping 0.08% to 1.3112 ahead of July manufacturing data out of the UK which was expected to show a slight dip at the start of the third quarter.
Investors were also looking ahead to Thursday’s Bank of England meeting, with most analysts expecting a quarter point rate increase.
The Australian dollar was lower, with AUD/USD down 0.32% to 0.7404 amid concerns over an escalation in trade tensions.
According to reports, the U.S. is planning to increase tariffs on $200 billion worth of Chinese imports to 25% after initially setting them at 10%.
The New Zealand dollar was also lower, with NZD/USD down 0.34% to 0.6796.