Investing.com - The dollar strengthened against most major currencies on Wednesday after investors digested the Federal Reserve's statement on monetary policy and determined that despite dovish language, rates still remain on track to rise in 2015.
In U.S. trading on Wednesday, EUR/USD was down 0.46% at 1.2904.
The Federal Reserve said earlier it was leaving its benchmark interest rate unchanged at 0.00-0.25% and added it would likely close its monthly bond-buying program in October.
Prior to Wednesday's policy statement, the Fed was buying $25 billion in Treasury debt and mortgage-backed securities a month to stimulate the economy, a monetary policy tool known as quantitative easing that aims to suppress long-term interest rates, weakening the dollar as a side effect.
The Fed decided earlier to trim that figure to $15 billion and will likely close it at its Oct. 28-29 meeting, which gave the dollar support.
Still, the Fed added it won't rush to raise interest rates due to headwinds still facing the labor market, dovish language that would otherwise weaken the greenback.
"On balance, labor market conditions improved somewhat further; however, the unemployment rate is little changed and a range of labor market indicators suggests that there remains significant underutilization of labor resources," the Fed said in its statement.
"It likely will be appropriate to maintain the current target range for the federal funds rate for a considerable time after the asset purchase program ends, especially if projected inflation continues to run below the Committee's 2 percent longer-run goal, and provided that longer-term inflation expectations remain well anchored."
Markets have interpreted the phrases "considerable time" and "underutilization of labor resources" as hints that policy may remain looser for longer than expected, though after digesting the statement, markets assumed the Fed remains on course to hiking interest rates in 2015, which gave the dollar support.
The dollar was up against the yen, with USD/JPY up 1.00% at 108.19, and up against the Swiss franc, with USD/CHF up 0.84% at 0.9404.
The greenback was up against the pound, with GBP/USD down 0.01% at 1.6275.
A poll released earlier found that 51% of Scots favored voting no on breaking away from the U.K., while 49% favored independence.
The pound saw support on the news, as recent polls gave the secessionists the majority, though the race was still seen as neck-and-neck with those still on the fence able to tip Thursday's vote in any direction.
A strong U.K. employment report also helped underpin demand for the British currency.
Earlier Wednesday, the Office for National Statistics reported that the number of people claiming unemployment benefits in the U.K. fell by 37,200 last month, beating 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 U.K. unemployment rate declined to 6.2% in the three months to July from 6.4% in the previous three month period. It was the lowest jobless rate since the late 2008 and was ahead of forecasts of 6.3%.
The dollar was up against its cousins in Canada, Australia and New Zealand, with USD/CAD up 0.17% at 1.0989, AUD/USD down 1.36% at 0.8970 and NZD/USD down 1.19% at 0.8102.
The US Dollar Index, which tracks the performance of the greenback versus a basket of six other major currencies, was up 0.54% at 84.68.
On Thursday, the U.S. is to produce a flurry of economic data, including reports on initial jobless claims, building permits, housing starts and manufacturing activity in the Philadelphia region.
Markets will also track Scotland's referendum on independence.