The dollar moved lower against the other major currencies on Wednesday, even after data showed that U.S. pending home sales rose more than expected in March as sentiment on the greenback remained fragile ahead of the Federal Reserve’s policy statement due later in the day.
The National Association of Realtors said its pending home sales index rose by 1.4% last month, beating expectations for a gain of 0.5%. Pending home sales in February advanced 3.4%, whose figure was revised slightly down from a previously reported gain of 3.5%.
But investors remained cautious ahead of the Fed’s policy statement amid ongoing uncertainty over the pace and timing of future rate hikes.
Market participants were also looking ahead to the conclusion of the Bank of Japan’s policy meeting on Thursday amid heightened expectations for fresh easing measures
The yen fell 2.1% against the dollar on Friday after Bloomberg reported that the BoJ could expand the negative interest rate policy it put in place in January at the conclusion of its rate review.
Some investors believe the bank will not roll out further easing measures as it continues to assess the impact of negative rates.
But most analysts expect the BoJ to cut its forecasts for growth and inflation as the strong yen and a severe earthquake this month which has disrupted supply chains cloud the economic outlook.
Earlier data showed that the U.K. economy grew 0.4% in the three months to March, in line with economists’ expectations, but slowing from 0.6% in the prior quarter.
The economy grew at an annual rate of 2.1% in the first quarter, slightly higher than economists’ expectations for growth of 2.0% and matching the previous quarter.
The Aussie came under pressure after data showed that consumer prices unexpectedly fell in the first quarter as lower oil prices weighed.
The weak data was seen as increasing the chances of a rate cut from the country’s central bank at its upcoming policy meeting next week.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was down 0.13% at 94.33.