TOKYO- The dollar hovered near multi-week lows versus major peers on Tuesday, weighed by subdued Treasury yields ahead of the Federal Reserve’s policy decision this week, while the yen hardly budged after the Bank of Japan kept its policy on hold.
The safe-haven greenback was also out of favor after world stocks started the week hitting a record high, amid increasing investor confidence in a rapid global recovery from the pandemic.
“The dollar doesn’t seem to have the strength it had earlier this year,” said Kyosuke Suzuki, chief of financial algotech company at Ryobi Systems. “It had been driven by various expectations, such as massive fiscal spending and speedy vaccinations in the States. Most of those appear to have been priced in.”
The dollar index, which tracks the US currency against six peers, was little changed at 90.947 in mid-Asian session, after dipping to the lowest since March 3 overnight at 90.679.
The dollar added 0.1 percent to 108.18 yen, another haven currency, continuing its rise from the seven-week low of 107.48 reached Friday.
The yen showed a muted response after the Bank of Japan kept its monetary policy on hold as widely expected.
Additionally, no change to policy is expected when the Federal Open Market Committee ends its two-day meeting on Wednesday.
However, the market will pay close attention to comments from Fed Chairman Jerome Powell, who is likely to face questions over whether improving conditions warrant a withdrawal of monetary easing.
