Forexpros – The U.S. dollar was trading in a tigh range against the other major currencies Wednesday, as traders awaited the conclusion of the Federal Reserve’s policy setting meeting later in the session.
During U.S. afternoon trade, the dollar was little changed against the euro, with EUR/USD easing down 0.03% to 1.2301.
Keeping the greenback in check, the U.S. central bank was expected to stop short of announcing a third round of quantitative easing measures, but to indicate that it remained ready to act to spur economic growth if necessary.
Earlier in the day, the Institute for Supply Management said that its U.S. manufacturing purchasing managers’ index rose to 49.8 in July from 49.7 in the preceding month, but remained below the 50 level that separates contraction from expansion.
Analysts had expected the ISM manufacturing PMI to come in at 50.2.
The data came after payroll processor ADP said the U.S. private sector added a seasonally adjusted 163,000 jobs in July, beating expectations for an increase of 120,000.
June’s figure was revised down to 172,000, slightly lower that the initial estimate of 176,000.
The euro remained supported by lingering optimism that the European Central Bank would unveil major steps to counter the debt crisis in the euro zone at its policy meeting on Thursday, after ECB head Mario Draghi pledged last week to do whatever is necessary to preserve the euro.
The greenback was higher against the pound, with GBP/USD falling 0.44% to hit 1.5609, following a report earlier showing that the U.K. manufacturing sector contracted more-than-expected in July.
The Markit/CIPS U.K. manufacturing PMI dropped to 45.4 in July, the lowest level since March 2009, from a downwardly revised 48.4 in June and well below forecasts for a reading of 48.7.
The weak data fuelled expectations for more monetary easing by the Bank of England in the coming months, after data last week showed that the U.K. economy contracted in the three months to June, extending the recession into a third quarter.
Earlier Wednesday, a report revealed U.K. house prices fell at the fastest annual rate in almost three years in July.
Elsewhere, the greenback edged higher against the yen and the Swiss franc, with USD/JPY inching up 0.01% to 78.13 and USD/CHF easing up 0.06% to 0.9768.
The greenback remained slightly lower against its Canadian, Australian and New Zealand counterparts, with USD/CAD slipping 0.19% to 1.0013,AUD/USD edging up 0.06% to 1.0511 and NZD/USD climbing 0.39% to trade at 0.8120.
The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, inched up 0.02% to 82.74.
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