Yen Gains Strength Ahead of US Monetary Policy Announcement
The yen gained slightly as investors looked ahead to a widely expected rate hike by the Federal Reserve later Wednesday.
New Zealand said its current account deficit in the third quarter widened to NZ$4.75 billion from NZ$1.17 billion a year ago, but narrower than the expected NZ$4.90 billion.
NZD/USD traded at 0.6771, up 0.13%, while AUD/USD traded at 0.7196, up 0.05%. USD/JPY changed hands at 121.61, down 0.06%.
Market participants awaited the Federal Reserve’s highly-anticipated policy decision due on Wednesday. Most investors expect the Fed to raise interest rates for the first time since June 2006.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was quoted flat at 98.21.
Overnight, the dollar moved higher against the other major currencies on Tuesday, supported by the release of positive U.S. economic reports and as markets awaited the Federal Reserve’s highly-anticipated policy decision on Wednesday.
The U.S. Commerce Department reported that consumer prices were unchanged from a month earlier, meeting expectations and following a gain of 0.2% in October.
Year-over-year, consumer prices were 0.5% higher from the same month a year earlier, compared to expectations for a 0.4% increase and after rising 0.2% in October.
Core CPI, which excludes food and energy costs, increased by 0.2%, meeting expectations.
Separately, the Federal Reserve Bank of New York said that its general business conditions index improved to -4.6 this month from a reading of -10.7 in November. Analysts had expected the index to rise to -6.0 in December.