U.S. Dollar Appreciates Before Fed Decision
The U.S. dollar drifted higher against its major counterparts in
the European session on Tuesday, as U.S. treasury yields rose
before the Fed meeting beginning today that is expected to give
cues on its monetary policy outlook.
The Fed is widely expected to maintain its ultra-easy monetary
policy, but traders will be paying close attention to any changes
to the accompanying statement that may signal a shift in the near
The Fed had pledged to keep borrowing costs unchanged until the
economy reaches full employment and inflation attains 2 percent
But analysts caution that improving labor market and rising
coronavirus vaccinations may warrant a withdrawal of the stimulus
earlier than expected.
The benchmark yield on 10-year note rose 1.581 percent. Yields
move inversely to bond prices.
The economic data due out later in the day includes U.S home
prices for February and consumer confidence in April.
The greenback spiked up to a 1-week high of 108.43 against the
yen from Monday's close of 108.08. If the greenback rises further,
it may find resistance around the 111.00 level.
The Bank of Japan maintained its monetary stimulus unchanged, as
widely expected, after tweaking its policy at the March
The board, governed by Haruhiko Kuroda, voted 8-1 to hold the
interest rate at -0.1 percent on current accounts that financial
institutions maintain at the central bank.
The greenback gained to 0.9172 against the franc, setting a
4-day high. The greenback is likely to find resistance around the
The greenback climbed to 4-day peaks of 1.2057 against the euro
and 1.3859 against the pound, compared to yesterday's closing
values of 1.2085 and 1.3896, respectively. The greenback is seen
finding resistance around 1.18 against the euro and 1.34 against
The U.S. currency edged up to 0.7767 against the aussie, 0.7202
against the kiwi and 1.2419 against the loonie, off its early lows
of 0.7804, 0.7237 and 1.2389, respectively. On the upside, 0.75,
0.70 and 1.28 are seen as its next possible resistance levels
against the aussie, the kiwi and the loonie, respectively.
Looking ahead, Federal Housing finance agency's U.S. house price
index and S&P/Case-Shiller home price index for February and
consumer confidence index for April will be featured in the New