Graphic: renjith krishnan

The euro slipped against other currencies in Asian trade Wednesday as the market waited for the result of the US Federal Reserve's two-day policy meeting and European Central Bank talks.

The European unit sank to $1.2291 and 95.91 yen in Tokyo afternoon trade from $1.2302 and 96.12 yen in New York late Tuesday.

The dollar eased to 78.03 yen from 78.13 yen in New York.

Traders have increasingly eyed the yen as a safe haven amid turmoil in Europe and a lumbering US economic recovery.

Currency markets would likely see cautious trade ahead of the US Federal Open Market Committee (FOMC) meeting, said Daisaku Ueno, senior foreign exchange and fixed income strategist at Mitsubishi UFJ Morgan Stanley.

“The market will be in a wait-and-see mode before the release of US economic indicators and the results of the FOMC meeting later in the day,” he said.

Ueno said he expected the Fed to hold off taking any immediate action, instead hinting at possible easing measures in the fall.

“The key is whether the FOMC statement hints at easing at the next meeting,” said Osao Iizuka, head of FX trading at Sumitomo Mitsui Trust Bank.

“If that happens, the dollar will be sold.”

US economic data due later Wednesday include vehicle sales and the ISM purchasing managers survey, both for July. US non-farm payrolls data is out Friday.

Markets were also looking at a meeting of the European Central Bank Thursday after ECB president Mario Draghi pledged to do whatever was necessary to protect the embattled euro.

The dollar was mixed against other Asia-Pacific currencies.

It edged up to Sg$1.2458 from Sg$1.2452 on Tuesday and to 55.56 Indian rupees from 55.54 rupees.

It slipped to 1,125.60 South Korean won from 1,132.65 won, to 41.79 Philippine pesos from 41.82 pesos, to 9,445.00 Indonesian rupiah from 9,482.00, to 31.48 Thai baht from 31.56 baht and to Tw$29.95 from Tw$30.02.

The Australian dollar traded at $1.0488 from $1.0525 while the Chinese yuan bought 12.25 yen from 12.26 yen. - Sapa-AFP