MW: Dollar edges down vs. rivals ahead of FOMC decision
By MarketWatch
TOKYO (MarketWatch) - The dollar edged down against the yen and euro in Asian trading Tuesday, as investors awaited the results of the U.S. Federal Reserve's policy meeting later in the session and the Bank of Japan policy decision on Wednesday.
The BoJ has maintained its benchmark unsecured overnight call loan rate at 0.1% since December 2008 -- the same month Fed policy makers cut their federal-funds rate target to a range of 0% to 0.25%.
Japanese central bankers are expected to discuss additional liquidity-boosting steps at their two-day policy board meeting, which started Tuesday. They will likely focus on a proposal to double the scale of a lending facility introduced in December, according to recent media reports.
The Fed will repeat its pledge that interest rates can remain at historic lows "for an extended period" following its meeting Tuesday, analysts said. But for the time being, the Federal Open Market Committee isn't likely to make significant changes to the wording of the statement. Read Fed outlook.
The dollar index (DXY 80.12, -0.14, -0.17%) , which measures the U.S. unit against a trade-weighted basket of six major currencies, slipped to 80.131 from 80.240 in late U.S. trading Monday.
The euro rose to $1.3691 from $1.3674 late Monday. The British pound bought $1.5046, compared with $1.5054.
The dollar lost ground against the Japanese yen, buying 90.1 yen, down from 90.52 yen late Monday.
Meanwhile, pressure on China to revalue its yuan continued. A bipartisan group of 130 U.S. lawmakers issued an open letter Monday, calling on the Obama administration to label China a currency manipulator and impose sanctions. See full story on U.S. lawmakers and China yuan.
"The impact of China's currency manipulation on the U.S. economy cannot be overstated," the letter said. "U.S. exports to the country cannot compete with the low-priced Chinese equivalents, and domestic American producers are similarly disadvantaged in the face of subsidized Chinese imports."
On Monday, the dollar advanced after surprisingly good U.S. economic data, with the euro under pressure as expectations for a detailed aid package for Greece were played down by euro-zone finance ministers. See Monday's Currencies report.
