Dollar Down Slightly Vs Yen As Fed, BoJ Awaited
The dollar drifted slightly weaker against the yen in early Asia on Wednesday as the Fed gets ready to detail its policy viws and with investors awaiting the latest Bank of Japan policy review due on Thursday.
The policymaking FOMC will announce plans to begin unwinding its $4.5tn bond portfolio at the conclusion of its meeting on Wednesday.
As well as plans for balance sheet unwinding, the Fed’s Summary of Economic Projections and dot-plot are expected garner much of the attention, as investors are keen to assess whether the slowing pace of inflation has altered the central bank’s longer-term view on interest rates.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was last quoted down 0.21% to 91.62.
New Zealand reports its current account balance for the second quarter with a deficit of 3% seen on a NZ$8.08 billion gap on year. Japan reports its trade balance for August with a ¥94 billion surplus seen.
Overnight, the dollar was roughly unchanged against a basket of major currencies on Tuesday as a mixed report on U.S. housing activity weighed on sentiment but easing geopolitical uncertainty limited losses in the greenback.
The dollar came under pressure after a pair of mixed reports on the U.S. housing sector tapered investor expectations of solid third quarter-growth.
The Commerce Department said Tuesday U.S. homebuilding fell 0.8% to a seasonally adjusted annual rate of 1.18 million units in August, well below economists’ estimates of a 1.7% rise.
The report also highlighted a sharp 5.7% rise in building permits to a rate of 1.3 million units. That was the highest level since January, beating forecasts of a 0.8% decline.
Downside momentum in the dollar was limited, however, as it made strong gains against its safe-haven counterparts like the yen and Swiss franc amid fading geopolitical uncertainty on the Korean Peninsula.