The dollar inched
up against most major currencies on Wednesday, as investors eyed a U.S.
Federal Reserve statement later in the day for guidance on whether bets
for a June interest rate hike are justified.
The
Fed is widely expected to keep interest rates unchanged at the end of
its two-day policy meeting on Wednesday, but investors will be looking
to see whether the central bank downplays the recent soft patch in the
economy to leave the door open for a move next month.
A June hike is currently 70 percent priced in, according to CME FedWatch. The dollar inched up 0.2 percent against its broad index ahead of the meeting. Against the yen, the dollar was up just 0.1 percent to 112.12, close to a six-week high of 112.33 yen set on Tuesday.
Weak U.S. April auto sales data released on Tuesday added to recent worries about the outlook for the U.S. economy, which grew at its slowest rate in three years in the first quarter of the year.
But with the trading close to its weakest levels since the days after U.S. President Donald Trump's election in early November, currency analysts said enough bad news had been priced in, and that the risks to the greenback therefore were broadly to the upside.
Market participants may be wary of actively buying the dollar against the yen for now, said Satoshi Okagawa, senior global markets analyst for Sumitomo Mitsui Banking Corporation in Singapore.
The greenback has risen against the yen over the past few weeks as investor risk aversion diminished, helped in part by reduced concerns over geopolitical tensions.
The euro edged down 0.1 percent to $1.0915, trading within sight of a 5-1/2 month high of $1.0951 scaled last week after the centrist Emmanuel Macron's victory against anti-euro nationalist Marine Le Pen in the first round of France's presidential elections.
A June hike is currently 70 percent priced in, according to CME FedWatch. The dollar inched up 0.2 percent against its broad index ahead of the meeting. Against the yen, the dollar was up just 0.1 percent to 112.12, close to a six-week high of 112.33 yen set on Tuesday.
Weak U.S. April auto sales data released on Tuesday added to recent worries about the outlook for the U.S. economy, which grew at its slowest rate in three years in the first quarter of the year.
But with the trading close to its weakest levels since the days after U.S. President Donald Trump's election in early November, currency analysts said enough bad news had been priced in, and that the risks to the greenback therefore were broadly to the upside.
Market participants may be wary of actively buying the dollar against the yen for now, said Satoshi Okagawa, senior global markets analyst for Sumitomo Mitsui Banking Corporation in Singapore.
The greenback has risen against the yen over the past few weeks as investor risk aversion diminished, helped in part by reduced concerns over geopolitical tensions.
The euro edged down 0.1 percent to $1.0915, trading within sight of a 5-1/2 month high of $1.0951 scaled last week after the centrist Emmanuel Macron's victory against anti-euro nationalist Marine Le Pen in the first round of France's presidential elections.
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