Investing.com - The dollar held steady against the other major currencies on Wednesday, as investors eyed the Federal Reserve’s highly-anticipated policy statement due later in the day.
USD/JPY held steady at 111.25.
Investors remained cautious ahead of the Fed’s policy statement amid ongoing uncertainty over the pace and timing of future rate hikes.
Market participants were also looking ahead to the conclusion of the Bank of Japan’s policy meeting on Thursday amid heightened expectations for fresh easing measures.
The yen fell 2.1% against the dollar on Friday after Bloomberg reported that the BoJ could expand the negative interest rate policy it put in place in January at the conclusion of its rate review.
Some investors believe the bank will not roll out further easing measures as it continues to assess the impact of negative rates.
But most analysts expect the BoJ to cut its forecasts for growth and inflation as the strong yen and a severe earthquake this month which has disrupted supply chains cloud the economic outlook.
EUR/USD was also unchanged at 1.1301.
The dollar was steady against the pound and the Swiss franc, with GBP/USD at 1.4589, near Tuesday’s 10-week high of 1.4637, and with USD/CHF at 0.9729.
Sterling pared earlier gains after data showed that the U.K. economy grew 0.4% in the three months to March, in line with economists’ expectations, but slowing from 0.6% in the prior quarter.
The economy grew at an annual rate of 2.1% in the first quarter, slightly higher than economists’ expectations for growth of 2.0% and matching the previous quarter.
The Australian and New Zealand dollars were weaker, with AUD/USD down 1.99% at 0.7594 and with NZD/USD retreating 0.75% to 0.6847.
The Aussie came under pressure after data earlier showed that consumer prices unexpectedly fell in the first quarter as lower oil prices weighed.
The weak data was seen as increasing the chances of a rate cut from the country’s central bank at its upcoming policy meeting next week.
Elsewhere, USD/CAD edged down 0.15% to a fresh nine-month low of 1.2583.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was steady at 94.42.