Dollar lower ahead of Fed decision

Dollar lower ahead of Fed decision

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The US dollar weakened a bit versus the euro on Wednesday ahead of announcement of a new decision on US interest rates by the Federal Reserve, due later in the day, in which the Fed is expected to hold rates steady for the time being.

In late morning trade in New York, the dollar traded at $1.4201 to the euro.

The pound was also down in relation to the euro, trading at 85.97p to the shared currency on a Bank of England forecast that inflation will remain below 2 percent and could go below 1 percent, and that economic recovery will continue to be slow.

Consumer inflation in the UK was at an annual rate of 1.8 percent in June, according to the UK Office for National Statistics.

Meanwhile, the Norwegian krone gained on the euro after Norges Bank held interest rates there unchanged at 1.25 percent but said that it could begin to raise rates sooner than had been expected.

Previously the bank said rates would not change before mid-2010.

At late morning in New York the krone traded at 8.6888 to the euro.

The yen was weaker versus the dollar and the euro as it traded at ¥96.2350 to the greenback and at ¥136.6586 to the shared currency.