Investing.com - The dollar held steady against the euro on Wednesday in a session void of major indicators as investors kept their gaze to next week, when the Federal Reserve will announce its decision on interest rates and any changes to its USD75 billion monthly bond-buying program.
In U.S. trading, EUR/USD was trading at 1.3556, down 0.04%, up from a session low of 1.3535 and off a high of 1.3581.
The pair was likely to find support at 1.3508, Monday''s low, and resistance at 1.3699, the high from Jan. 14.
Both currencies continued to see support from the International Monetary Fund''s decision this week to hike its global economic growth forecast to 3.7% from 2014 from an October forecast for 3.6% growth.
The news fueled expectations for central banks to wind down stimulus programs such as bond purchases going forward, the Federal Reserve especially, as the multilateral lending institution predicted the U.S. economy to expand 2.8% this year, up from an October forecast of 2.6%.
Many market participants held firm on their expectations for the Fed to trim its quantitative easing program to USD65 billion from the current USD75 billion at its next policy meeting that wraps up on Jan. 29.
Fed bond purchases aim to prop up the economy by suppressing long-term interest rates, thus weakening the dollar as a side effect as investors flock to asset classes like stocks.
The euro was down against the pound, with EUR/GBP sliding 0.65% to 0.8176, and flat against the yen, with EUR/JPY trading at 141.44.
The pound found support after the Office for National Statistics said that the rate of unemployment in the U.K. fell to 7.1% in the three months to November, just above the 7% level the Bank of England sees as a threshold for considering raising interest rates from their current record low of 0.5%.
It was the largest drop in unemployment since 1997 the ONS said.
Analysts had expected the jobless rate to fall to 7.3% from 7.4% in the three months to October.
The ONS said the number of people claiming jobless benefits fell by 24,000 in December, compared to expectations for a decline of 35,000.
The average earnings index rose by a seasonally adjusted 0.9% in November, compared to expectations for a 1% increase, after rising by 0.9% in the previous month.
On Thursday, The U.S. is release the weekly report on initial jobless claims and a private-sector report on existing home sales.
The euro zone is to release preliminary data on manufacturing and service-sector activity, while Germany and France are to release individual reports.