Investing.com - The dollar was steady against the euro and the yen on Wednesday, while the pound moved higher after data showed that the U.K. unemployment rate fell to 7.1% in November, raising questions over the Bank of England’s forward guidance.
USD/JPY edged up 0.10% to 104.39, up from the lows of 103.97 struck earlier in the session.
The yen briefly moved higher after the Bank of Japan kept monetary policy unchanged following its monthly policy meeting on Wednesday and maintained its assessment that Japan''s economy "has continued to recover moderately."
Demand for the dollar continued to be supported by expectations for a reduction to the Federal Reserve’s quantitative easing program at its policy meeting next week to USD65 billion from the current USD75 billion.
EUR/USD touched highs of 1.3580, and was last up 0.05% to 1.3567.
Meanwhile, GBP/USD hit 1.6565, the highest since January 2 and was last up 0.53% to 1.6562.
Sterling strengthened after official data showed that the U.K. unemployment rate fell to 7.1% in the three months to November, to stand just above the 7% level the BoE has said is its threshold for considering raising interest rates from their current record low of 0.5%.
Analysts had expected the jobless rate to fall to 7.3% from 7.4% in the three months to October.
The dollar was little changed against the Swiss franc, with USD/CHF dipping 0.05% to 0.9096.
The Australian dollar was stronger against its U.S. counterpart, with AUD/USD advancing 0.70% to 0.8867, recovering from the three-and-a-half year low of 0.8755 struck on Monday.
Data on Wednesday showed that Australian consumer prices rose 0.8% in the three months to December and were up 2.7% on a year-over-year basis. Market expectations had been for a 0.5% quarterly increase and an annual gain of 2.5%.
NZD/USD was up 0.21% to trade at 0.8332.
Elsewhere, USD/CAD edged up 0.01% to 1.0969, not far from Tuesday’s four-year peak of 1.1017.
The loonie, as the Canadian dollar is also known, remained under pressure amid expectations that the Bank of Canada would stick to its dovish stance on rates at Wednesday’s policy meeting.
The U.S. dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, edged down 0.07% to 81.15.
Jerusalem Post Annual Conference. Buy it now, Special offer. Come meet Israel's top leaders