By Lisa Twaronite, MarketWatch
TOKYO (MarketWatch) — The dollar stuck to relatively narrow ranges Wednesday, with an index measuring it against global rivals edging up ahead of the U.S. Federal Reserve’s policy decision.
The Fed is widely expected to make the formal decision to end its easing program of buying $600 billion of Treasury securities on June 30 as scheduled. It is also expected to hold interest rates steady and maintain its policy to keep its balance sheet from shrinking. Read Fed preview.
The FOMC’s policy-making Federal Open Market Committee meeting will be followed by Fed Chairman Ben Bernanke’s press conference.
The dollar recently gained on the euro on fears that the effects of Greece’s sovereign-debt woes would spread to the rest of the euro zone.
But those fears were somewhat alleviated late Tuesday, when Greece’s Prime Minister George Papandreou won a key confidence vote. That could help facilitate more austerity measures as the nation struggles to avoid defaulting on its debt. Read more on Greek vote.
“We see this as a positive for the euro insofar as it removes one of the (major) potential uncertainties” ahead of the next round of funding from the European Union and International Monetary Fund in early July under the existing Greek bailout program, said RBC Capital Markets senior currency strategist Sue Trinh.
“However, the path is far from clear for Greece, and the next significant issue that will need negotiating is a vote in the Greek parliament next Tuesday to pass the latest proposed austerity measures,” she said in a note to clients Wednesday.
The euro EURUSD -0.04% bought $1.4411, compared with $1.4417 in North American trading late Tuesday. See real-time currency quotes and tools.
The dollar index DXY -0.05% , which measures the performance of the U.S. unit against a basket of six other major currencies, edged up to 74.581 from 74.553.
The British pound GBPUSD -0.12% changed hands at $1.6244, compared with $1.6246.
Against the Japanese yen, the dollar USDJPY +0.01% rose to ¥80.25, from ¥80.13 late Tuesday.
The Australian currency AUDUSD +0.01% ticked up slightly to $1.0604 from $1.0601 Tuesday.
Lisa Twaronite is MarketWatch's Tokyo bureau chief.
