Investing.com – The dollar inched higher against a basket of global currencies on Wednesday, as investors awaited the Federal Reserve’s interest rate decision later during the session.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, rose by 0.15% to 94.06
The dollar held steady, as Federal Reserve policy decision due later in the session overshadowed housing data that undershot forecasts, pointing to a continued shortage of houses on the market.
The Commerce Department said on Wednesday new home sales rose 0.8 percent to a seasonally adjusted annual rate of 610,000 units last month. May's sales pace was revised down to 605,000 units from the previously reported 610,000 units.
Monetary policy, however, remained front and center, as investors expect the Federal Reserve to keep its benchmark rate unchanged.
Despite an unchanged decision widely expected, investors will parse the Federal Reserve statement for fresh insight into the central bank’s thinking on balance sheet reduction and future rate hikes.
The Federal Reserve indicated in May it plans to gradually sell off a chunk of its huge $4.5 trillion balance sheet later “this year”.
Meanwhile, GBP/USD rose to $1.3044, up 0.13%, after provisional economic growth data, measured by gross domestic product (GDP), met economists forecast.
UK GDP is estimated to have increased by 0.3% in the second-quarter, an improvement from the first-quarter, the Office of National Statistics said Wednesday.
EUR/USD traded at $1.1626, down 0.16%, while EUR/GBP dipped 0.32% to 0.8912.
USD/CAD traded roughly flat at $1.2508, weighed by an uptick in the loonie after oil prices continued to add to gains on Wednesday amid a bigger-than-expected drop in U.S. crude inventories.
USD/JPY rose to Y112.16, up 0.24%.