Dollar on edge ahead of Warsh's first meeting as Fed chair

U.S. Federal Reserve Chair Kevin Warsh / Reuters-Yonhap

The dollar inched higher against most major peers on Wednesday ahead of the Federal Reserve's first policy decision under chair Kevin Warsh, which could see some volatility as investors adjust to a new style of policy making and communication.

The euro was down 0.16 percent on the day at $1.1591, while the pound shed 0.15 percent to $1.34, as the dollar took a small safe haven boost from remarks by U.S. President Donald Trump that the memorandum of understanding on Iran was not final, and that he could resume a bombing campaign if he did not like it.

But the big event of the day, the Fed meeting, is still to come, and left investors hesitant to take on large positions. The Fed is widely expected to stand pat at Warsh's debut meeting. The statement, economic projections and news conference, however, will be scrutinised for any signals of the Fed dropping its easing bias as officials grow more hawkish on inflation risks.

"There have been many central banks meeting this month, but this is the one that's overshadowing everything," said Jane Foley, head of FX strategy at Rabobank.