NEW YORK, June 17 : The dollar edged higher on Wednesday ahead of the conclusion of the Federal Reserve's two-day policy meeting, the first to be chaired by Kevin Warsh, with markets closely watching for any signs of a hawkish shift from policymakers.

The Fed is widely expected to hold its benchmark rate steady in the range of 3.50 per cent to 3.75 per cent, though it may drop its easing bias from the policy statement. The U.S. central bank will also issue its Summary of Economic Projections and the closely watched "dot plot," offering markets a window into how Federal Open Market Committee members view the direction of monetary policy.

All eyes will be on the post-meeting press conference, where any signals Warsh offers on the Fed's outlook will be critical as inflation remains stubbornly above the central bank's 2 per cent annual target.

Warsh, appointed by President Donald Trump, has suggested he will adopt a different governing approach from his predecessor Jerome Powell, with one notable distinction being his reluctance to commit to holding press conferences after every policy meeting, a practice Powell had instituted, though the Fed confirmed there will be one on Wednesday.

"We're at a point now where we've probably reached maximum interaction between the Fed and the markets," said Eric Theoret, a foreign exchange strategist at Scotiabank.

Powell remains a voting member of the FOMC as a governor.

With inflation likely to dominate the press conference, traders will also be listening for any comments from Warsh on alternative inflation gauges he is known to favor, including the Dallas Fed's trimmed mean measure, which points to softer price pressures than headline Personal Consumption Expenditures, or PCE. 

"If we were to get maybe just a bit more of an emphasis on that (on Wednesday), that would be very interesting because that would definitely give Warsh cover to start to manage expectations for lower rates," Theoret said.

An interim agreement to end the Iran war has pushed oil prices lower and should help ease some inflationary pressure in the months ahead, though the pass-through to consumer energy prices may take time. Fed funds futures traders are currently pricing in 60 per cent odds of a rate hike this year.

The dollar showed little reaction to data on Wednesday showing that U.S. retail sales increased more than expected in May.

The dollar index, which measures the greenback against a baske...