(RTTNews) - The dollar was mixed Wednesday morning in New York, unable to sustain it overnight gains against the euro as traders geared up for the lastest interest rate decision from the Federal Reserve.
With risk aversion still the predominant theme, the dollar has recently strengthened against the the euro and loonie, while heading lower versus the yen, which is now the preferred safe haven play.
The Fed is unlikely to suggest an end to its near-zero interest rate policy, as the economy still grapples with unemployment and shaky consumer confidence, while facing a benign inflation environment. The central bank is most likely to allow the emergency liquidity programs to expire as per previous schedule.
The Commerce Department is due to release its new home sales report for December at 10 AM ET. The consensus estimate calls for an increase in new homes sales to 370,000.
The payback effect of stimulus-induced home sales was evident in November's new home sales, which showed sales at a 355,000 annualized rate, marking the lowest level since April.
The Energy Information Administration is scheduled to release its weekly petroleum inventory report for the week ended January 22nd at 10:30 AM ET.
The dollar touched a new 5-month high of 1.4020 against the euro, but eased half a cent from there by mid-morning.
Versus the yen, the dollar edged down to a monthly low of 89.13 before making a modest improvement to 89.60.
The Bank of Japan (BOJ) in its monthly report on Wednesday maintained its stance that the nation's economy is picking up, but does not yet have sufficient momentum to support a self-sustaining recovery in domestic demand.
The dollar dropped a penny to 1.6235 versus the sterling this morning, extending a long run of directionless trading.
The Bank of England may find it difficult to keep inflation within the target as services and import price inflation continue to rise, the central bank's monetary policy member Andrew Sentance said Wednesday.
The buck extended its monthly high to near C$1.07 versus its Canadian counterpart yesterday, then leveled of to fetch C$1.0640 this morning.
President Barack Obama is scheduled to deliver the State of the Union address at 9 PM on Wednesday.
