The U.S. dollar registered a mixed performance against major currencies early Wednesday, edging lower ahead of a crucial batch of economic indicators and the Federal Reserve’s rate policy announcement.
Against the euro, the dollar slipped with USDEUR at 1.1497 compared to 1.1485 at Tuesday’s close, although it remained weaker than the 1.1568 level observed earlier in the week.
The British pound also gained ground, with GBPUSD trading at 1.3449, up from 1.3428 the previous day, but still below Tuesday morning’s level of 1.3566. Meanwhile, USDJPY dipped to 144.8620 from 145.2280, reflecting investor caution amid growing uncertainties in Japan’s trade and economic data.
Interestingly, the greenback strengthened against the Canadian dollar, rising to 1.3665 from 1.3646, amid the absence of major Canadian economic releases on the day. However, markets await remarks from Bank of Canada Governor Tiff Macklem later in the session.
The foreign exchange market is bracing for a wave of U.S. economic data, including housing starts, jobless claims, petroleum inventory reports, and the Atlanta Fed’s GDP nowcast update for Q2.
Amid this data-heavy environment, the Federal Open Market Committee (FOMC) is set to announce its interest rate decision later in the day. The CME FedWatch Tool shows a 99.9% probability that rates will remain unchanged, though market participants will closely watch Fed Chair Jerome Powell’s post-meeting press briefing for clues on future policy direction.
The Mortgage Bankers Association reported earlier that mortgage applications declined last week, despite easing rates, underscoring persistent uncertainty in the housing market.
In Europe, inflation and current account data released Wednesday pointed to a slowdown in consumer price gains and a narrowing of the current account surplus. ECB policymakers including Philip Lane and Luis de Guindos are scheduled to speak later in the day.
In Asia, data revealed that Japan’s trade deficit widened significantly in May, while domestic business confidence indicators showed resilience.
The broader currency market remains volatile as investors weigh global central bank policy moves, inflation trends, and geopolitical risks—particularly those emanating from the Middle East.
