LONDON—The dollar came under pressure again Wednesday amid expectations that the Federal Reserve will expand its quantitative-easing policy.
The euro rose to $1.3858 from $1.3836 late Tuesday in New York. The single currency also managed to rise to 115.13 yen from 115.11 yen.
Still, investors were reluctant to push the euro too much closer to $1.40 ahead of the European Central Bank meeting Thursday and the meeting of finance ministers from the Group of Seven leading industrial nations in Washington this weekend.
Although the ECB is expected to remain hawkish, as members of its governing council debate exit strategies from the unconventional monetary easing introduced the year before last, some at the central bank may express concern about the risk that euro strength could pose to the currency bloc's recovery.
Meanwhile, the International Monetary Fund issued its own warning about a "currency war" if countries continue to use exchange rates to solve domestic problems.
T,he dollar also slipped against the yen, falling to 83.07 yen from 83.2 yen, but losses were limited by the continued threat of more Japanese intervention. There had been talk in New York late Tuesday that Japanese agencies close to the government were active buyers of the dollar against the yen. However, there was still no indication that the Ministry of Finance has launched a new intervention exercise through the Bank of Japan.
The prospect of new unemployment data from the U.S. Friday is also hanging over the dollar, especially as a disappointing number will only increase speculation about the possibility of more quantitative easing next month.
Elsewhere, a rally in the pound, meanwhile, ran out of steam, with analysts saying that market participants were also getting nervous ahead of the Bank of England's latest policy meeting. The pound gave up much of its earlier gains but was still up at $1.5912 from $1.5896.
