By Yasin Ebrahim
Investing.com – The dollar was little changed Wednesday after the Federal Reserve kept rates steady and signaled that it was in no hurry to move off the sidelines.
The U.S. dollar index, which measures the greenback against a trade-weighted basket of six major currencies, rose by 0.06% to 97.88.
In a unanimous decision, the Federal Open Market Committee left its benchmark rate unchanged in the range of 1.5% to 1.75%.
"The committee judges that the current stance of monetary policy is appropriate to support sustained expansion of economic activity, strong labor market conditions, and inflation returning to the committee's symmetric 2(%) objective," the Fed said.
The Fed's decision arrived just hours after data showed weaker-than-expected housing activity.
The National Association of Realtors' measure of pending home sales unexpectedly fell 4.9% to 103.2 in December. That was the biggest decline since May 2010.
The surprise drop in housing activity is largely believed to be transitory amid a favorable backdrop of low-interest rates.
Upside in the dollar was also kept in check by demand for safe-haven yen as the spread of the coronavirus has been gathering pace, with the death toll in China rising to 132.
USD/JPY was flat at Y109.14 and USD/CHF rose 0.06% to 0.9734.
EUR/USD fell 0.16% to $1.1002, while GBP/USD fell 0.03% to $1.3024.
Cable will come into focus on Thursday, with the Bank of England expected to keep rates unchanged, but leave the door open for further easing later in the year.
"Any relief rally in sterling will prove short-lived as we believe markets are likely to roll out their rate cut expectations into the coming months," Bank of America said.
USD/CAD rose 0.30% to C$1.3195 after the loonie slid on a fall in oil prices following mixed petroleum data as crude supplies rose, but product inventories fell.
The Commerce Department said on Wednesday durable goods orders rose 2.4% last month, beating economist forecast for a 0.4% rise. But core durable goods orders unexpectedly fell 0.1%.
The beat on the headline durable goods orders is "misleading" as it was largely driven by an rise in aircraft defense orders, Jefferies said.
"This is a weak (durables goods) report and does not provide encouragement that conditions in the manufacturing sector are improving or will improve anytime soon," it added.