Investing.com - The euro held steady against the dollar on Wednesday, ahead of a Federal Reserve monetary policy statement which was widely expected to provide insight into the timing of an interest rate increase.
EUR/USD almost unchanged for the day at 1.0601, having rebounded from the 12-year lows of 1.0461 struck on Friday.
The Fed is widely expected to start raising interest rates around mid-year and investors were expecting the U.S. central bank to drop its reference to being “patient” on the timing of a rate hike in its policy statement.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was steady at 100.02.
The dollar has strengthened on the back of the diverging monetary policy stance between the Fed and central banks in Europe and Japan.
The single currency weakened across the board after the European Central Bank started asset purchases under its trillion-euro quantitative easing program earlier this month, pushing euro area bond yields to new lows.
The Bank of Japan expanded it stimulus program in late October amid concerns that falling oil prices could lower the inflation outlook.
The dollar was slightly lower against the yen, with USD/JPY slipping 0.16% to 121.17, holding below last week’s eight year peaks of 122.02.
Elsewhere, the dollar jumped against the Swedish krona after Sweden’s central bank cut rates further into negative territory and expended its asset purchase program in a bid to stem the appreciation of the krona.
The Riksbank cut its benchmark interest rates to minus 0.25% from minus 0.1% previously and said it would buy government bonds worth 30 billion krona.
USD/SEK was up 1.08% to 8.8057, from around 8.6549 ahead of the decision, while EUR/SEK rose to 9.33 from 9.17 earlier.