Investing.com – The dollar edged higher on Wednesday as investors awaited the Federal Reserve’s policy statement for fresh clues on future tightening, while the New Zealand dollar surged on strong domestic jobs data.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was at 94.50 by 03:42 AM ET (07:42 AM GMT), holding below Friday’s three month peak of 95.06.
The Fed was expected to leave interest rates unchanged at the conclusion of its two-day policy meeting later Wednesday, but investors were waiting for any indications that it will resume raising rates next month as expected, and the timing of any rate hikes in 2018.
Traders were also awaiting President Donald Trump’s announcement about the next head of the U.S. central bank. Recent reports have indicated that Trump is likely to appoint Fed Governor Jerome Powell, who is viewed as more dovish than other candidates.
Demand for the dollar was underpinned after U.S. economic reports on Tuesday indicated that the economy is gaining momentum ahead of employment data on Friday.
Consumer confidence jumped to an almost 17-year high last month and another report showed that wage growth accelerated in the third quarter.
The dollar was higher against the yen, with USD/JPY rising 0.22% to 113.90.
The New Zealand dollar rallied, with NZD/USD jumping 1.1% to 0.6922 after data showing that the country’s unemployment rate fell to a nine year low of 4.6%.
The kiwi had come under pressure in recent weeks amid fears that a slowdown in foreign investment under the incoming Labor coalition government could hit growth and prompt the country’s central bank to keep rates at record lows for longer.
The euro was little changed, with EUR/USD at 1.1646, not far from the three-month low of 1.1573 hit late last week after the European Central Bank said it will extend its bond purchases into September 2018.