Currencies Overview: Dollar Hovering Above Its Lowest Level in Weeks Before Fed Meeting

The dollar hovered above its lowest level in weeks against other major currencies today, Tuesday, under pressure from weak US Treasury yields ahead of the Federal Reserve’s policy decision this week, while the yen was little changed after the Bank of Japan kept interest rates unchanged.

The dollar, which is considered a safe haven, lost its attractiveness to a large extent after global stocks began the week at record highs, but a slight decline in the markets today contributed to keeping the US currency above its lows in recent times.

Currencies were trading significantly weak ahead of the two-day Federal Reserve meeting that concludes on Wednesday, but no policy change is expected.

And the dollar index, which tracks the performance of the US currency against six of its major players, rose less than 0.1% at 90.972 in morning trade in London, after falling to its lowest level since the third of March overnight at 90.679.

The dollar advanced 0.2% to 108.34 yen, another safe-haven currency, to continue rising from a seven-week low of 107.48 yen on Friday.

The dollar has fallen about 3% since late March as US Treasury yields moved in a narrow range after falling from a 14-month high of 1.7760%, weakening the dollar’s yield appeal.

The euro fell 0.1% to $1.2069, but remained close to the two-month peak it reached on Monday at $1.2117.

The commodity-linked Australian dollar, an indicator of risk appetite, fell 0.3% to 0.7781 after rising 0.7% last night, close to a five-week peak.

The Chinese yuan fell in foreign trade 0.1%, after rising to a seven-week high of 6.4710 against the dollar.