Forexpros - The U.S. dollar was mixed against its major counterparts on Wednesday, as markets awaited the Federal Reserve’s monetary policy decision, amid speculation over the possibility of more easing from the U.S. central bank.
During U.S. morning trade, the dollar was lower against the euro, with EUR/USD up 0.14% to hit 1.2702.
The euro found support after Greek political leaders announced that a coalition government had been formed, which will allow Athens to resume negotiations with creditors on its international bailout deal.
Meanwhile, the yield on Spanish 10-year bonds pulled back to 6.77%, after climbing to euro-era highs earlier in the week, amid fears that Madrid will be forced to seek a full-fledged international bailout.
Sentiment on the greenback remained subdued ahead of the outcome of the Fed’s policy setting meeting, amid speculation that the U.S. central bank may implement a third round of quantitative easing measures after a recent string of disappointing economic data.
The greenback was slightly lower against the pound, with GBP/USD edging up 0.07% to hit 1.5735.
The pound fell to a session low against the greenback earlier after the minutes of the Bank of England’s June meeting showed that four policymakers, including central bank Governor Mervyn King, voted in favor of another round of quantitative easing this month, while five voted against.
Meanwhile, official data showed that the number of people claiming unemployment benefits in the U.K. rose to 8,100 in May, defying expectations for a decline of 3,000.
The U.K. unemployment rate held steady at 8.2%, in line with expectations.
Elsewhere, the greenback climbed to a session high against the yen, with USD/JPY climbing 0.54% to hit 77.38, but remained lower against the Swiss franc, with USD/CHF sliding 0.17% to hit 0.9452.
In Switzerland, a report showed that investor sentiment plunged to its lowest level in five months in June, amid worries over the ongoing sovereign debt crisis in the euro zone.
The Centre for European Economic Research (ZEW) said its indicator of Swiss economic sentiment tumbled to minus 43.4 in June from a reading of minus 4.0 the previous month. Analysts had forecast a reading of minus 15.0.
The greenback was broadly higher against its Canadian, Australian and New Zealand counterparts, with USD/CAD rising 0.21% to hit 1.0198, AUD/USD dipping 0.01% to hit 1.0188 and NZD/USD down 0.20% to hit 0.7965.
Earlier Wednesday, official data showed that New Zealand’s current account deficit widened to NZD2.8 billion in the first quarter, against expectations for a deficit of NZD1.1 billion as dairy export prices and oil exports fell and the nation imported more fuel.
The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was little changed, dipping 0.02%, to trade at 81.60.
The Federal Reserve’s policy announcement was to be followed by a closely watched press conference with Fed Chairman Ben Bernanke, to discuss the bank’s decision.
