The U.S dollar held near a 2-½ month high on the EUR and kept a firmer footing against the Japanese yen on Wednesday as the market waited to see if the U.S. Federal Reserve would give any signal on when Interest Rates might begin to rise.

The greenback was near a 1-week high against the Yen before reports forecast to show U.S. housing starts rebounded and consumer prices gained. Traders increased bets that the Fed will raise its policy rate by June as the Federal Open Market Committee (FOMC) began a 2 day rate-setting meeting.

The U.S dollar traded at $1.4542 per EUR from $1.4538 yesterday when it reached $1.4504, the strongest level since Oct. 2nd. The U.S. currency was at 89.58 yen from 89.61 yesterday after reaching 89.95, the strongest level since Dec. 7th.

Fed policy makers are expected to keep benchmark rates steady and retain the vast majority of the forward-looking portions of its statement on the economy due this afternoon. With data pointing to the upside in the U.S. economy, there is a growing speculation that there will be a change in rhetoric on monetary easing. Analysts said investors were keen to close short positions built up in the Dollar all year before 2009 book closings and that this may support the USD for the rest of the week and into next.

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