Article by ForexTime
Markets were quiet in Asian trading as investors prepare for the main risk event today, which is the Federal Open Market Committee (FOMC) monetary policy announcement. Most currency pairs were in ranges ahead of the event except of the Australian dollar which made big moves after some domestic inflation data.
The aussie dropped sharply after first quarter inflation data showed prices fell for the first time since 2009, and core inflation rose more slowly than expected. AUDUSD was down 1.1 percent at $0.7664 soon after the data. The trimmed mean CPI rose 0.2% q/q versus a forecast of 0.5%
In other currencies, Sterling held onto gains versus the dollar after hitting a 12-week high of $1.4640 yesterday as polls showed that Britons would vote in a June referendum to stay in the European Union. Support from US President Barack Obama for the “remain” campaign is helping as well.
The euro was steady at $1.1304 after strengthening 0.3 percent yesterday.
USDJPY slipped 0.1 percent to 111.15 yen. On Monday the pair hit a three-week high of 111.90. The main risk even for the yen will be Thursday’s Bank of Japan policy meeting. The dollar/yen pair will not likely make huge moves ahead of the FOMC decision tonight.
Free Reports:
The Federal Reserve is not expected to raise interest rates when the two-day meeting ends later in the day, but what would have an impact on the markets would be the Fed’s view on the economy. A more hawkish tone would keep the way open for future rate rises and this would boost the US dollar. Alternatively, a dovish tone would be negative for the greenback.
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