(Updates prices, adds comments; changes byline, dateline, pvs
* Traders take profits in dollar's recent gains
* Traders lean toward Fed maintaining current rate hike
* Fed statement, projections due at 2 p.m. EST (1900 GMT)
* Chair Yellen press conference at 2:30 p.m.
By Sam Forgione
NEW YORK, Dec 14 The U.S. dollar edged lower
against a basket of major currencies on Wednesday after traders
took profits from the greenback's recent gains on expectations
that the Federal Reserve would take a cautious stance on future
rate hikes this afternoon.
The dollar index, which gained nearly 4 percent between the
Nov. 8 U.S. election and last Friday, slipped on bets that the
Fed would maintain its projections for just two rate hikes next
year. The Fed is widely seen as likely to raise its main rate by
a quarter point to 0.50-0.75 percent.
The possibility that the Fed could surprise and increase the
projections, however, limited the dollar's losses heading into
the central bank's policy statement and projections at 2 p.m.
EST (1900 GMT) and a press conference by Fed Chair Janet Yellen
following at 2:30 p.m.
The Fed is widely seen as likely to raise its main rate by a
quarter point to 0.50-0.75 percent. It will be Yellen's tone and
the new forecasts for future rates that are expected drive the
Talk among traders this week has focused on the risks of
policymakers expressing concern at the dollar's gains or
alternatively ramping up the predicted pace of future rate hikes
in response to President-elect Donald Trump's spending plans.
"It is lightening of positions," said Thierry Albert Wizman,
global interest rates and currencies strategist at Macquarie Ltd
in New York. "Long dollar is probably one of the most over-held
positions out there so it's safe to say ... we should be looking
for some consolidation."
Analysts said the dollar's weakness showed a bias among
market participants that the Fed also may hint at financial
conditions having already tightened as a result of U.S. Treasury
yields having shot higher and the dollar gaining in the wake of
the Nov. 8 election.
The greenback's weakness Wednesday is "emblematic of
markets' low conviction in the Fed altering its outlook for
monetary policy," said Joe Manimbo, senior market analyst at
Western Union Business Solutions in Washington.
The dollar index, which measures the greenback against a
basket of six major currencies, was last down 0.3 percent at
100.770. The euro was last up 0.28 percent against the
dollar at $1.0655. The dollar was down 0.2 percent against the
yen at 114.93 yen, easing further from Monday's 10-month
high of 116.12 yen.
The dollar hit a six-day low against the Swiss franc
of 1.0084 francs.
(Reporting by Sam Forgione; Editing by Bill Trott)