NEW YORK: The US dollar moved higher against the euro and the pound while the Japanese yen fell again Wednesday ahead of policy meetings at the European Central Bank and Bank of England.
At 2100 GMT, the euro was at $1.2903, slightly down from $1.2920 late Tuesday, while the British pound fell to $1.6073 from $1.6132.
Traders had their eyes on Thursday's rate-setting meetings at the ECB and BoE, amid deep weakness in the economies overseen by both. Uncertainty over a bailout for struggling Spain also kept traders on edge.
In addition, the US Federal Reserve will release minutes of its last policy meeting that could shed more light on what factors led to the open-ended QE3 bond-buying stimulus effort decided then.
"The ECB meeting on Thursday will be key for the euro in the short term as ECB head Mario Draghi is likely to be pressed for more details on the bond-purchase plan he announced last month and what conditions will be attached to the Spanish bailout," said Currencies Direct analyst Alistair Cotton.
David Song, a currency analyst at DailyFX, warned that the Fed's minutes and decisions by the ECB and BoE were likely to inject volatility into forex markets.
"Beyond the European Central Bank and the Bank of England interest rate decisions, the Federal Open Market Committee Minutes may spark increased volatility in the currency market as FX traders weigh the outlook for monetary policy," said Song.
The yen weakened for a fourth straight day. The dollar rose to 78.51 yen from 78.15 yen Tuesday, while the euro pushed to 101.31 yen from 100.96.
The dollar also moved up to 0.9385 Swiss francs from 0.9361 francs.
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