Investing.com - The dollar held steady against the other majors currencies on Wednesday, as investors remained cautious ahead of the European Central Bank’s policy meeting on Thursday and the highly-anticipated Federal Reserve policy decision due next week.
EUR/USD edged up 0.11% to 1.0731.
Markets were still recovering after Italian voters rejected on Sunday constitutional changes backed by the government and the subsequent resignation of Prime Minister Matteo Renzi.
However there were indications that Italy would not hold early elections after Renzi’s resignation, with many analysts thinking it more likely that a caretaker government will be put in place until an election in 2018.
Meanwhile, the greenback remained broadly supported after Friday’s solid U.S. jobs report for November confirmed expectations for an interest rate hike by the Federal Reserve this month.
Elsewhere, GBP/USD declined 0.51% to trade at 1.2613 after data showed that U.K. manufacturing production fell 0.9% in October, disappointing expectations for a 0.2% rise and after a 0.6% increase the previous month.
Industrial production declined by 1.3% in October, also confounding expectations for an uptick of 0.2%.
The pound had rallied to nine-week highs on Tuesday after Chancellor Philip Hammond said the British government would not rule out the possibility of continuing to make payments into the European Union budget after Brexit in order to retain access to the single market.
USD/JPY was little changed at 114.07, while USD/CHF eased 0.10% to 1.0094.
The Australian dollar was weaker, with AUD/USD down 0.17% at 0.7447, while NZD/USD gained 0.35% to 0.7144.
Earlier Wednesday, the Australian Bureau of Statistics said the country’s gross domestic product fell 0.5% in the third quarter, confounding expectations for a 0.3% rise.
Year-on-year, Australia’s GDP increased by 1.8% in the three months to September, compared to expectations for a 2.5% rise.
Meanwhile, USD/CAD held steady at 1.3274, as investors awaited the Bank of Canada’s interest rate decision due later in the day.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was steady at 101.49.