Dollar little changed as traders seek direction from Fed meeting

TOKYO: The U.S. dollar held steady against major currencies on Monday, after posting its biggest weekly gain in more than a month, as traders closed short positions ahead of a Federal Reserve policy meeting this week.

The greenback was trading little changed at US$1.21075 against the euro in Asia, after touching an almost one-month top of US$1.2093 in the previous session, amid caution ahead of the Fed meeting that runs two days to Wednesday.

The yen was at 109.715, after weakening to 109.840 on Friday for the first time since June 4.

The dollar index, which measures the U.S. currency against six rivals, was mostly flat at 90.510 from as high as 90.612 on Friday. It finished last week with a 0.4per cent advance.

In recent weeks, the index has fluctuated as traders weighed if inflationary pressure as the economy reopens after the pandemic could force the Federal Open Market Committee (FOMC) into an earlier tapering of stimulus.

Repeated comments by policy makers that inflation would be transitory calmed those jitters, but markets also now anticipate the Fed may be close to giving clues on the timing for slimming its asset-purchase programme.

"The dollar repositioning shows some nerves heading into the FOMC policy update," NAB strategist Jason Wong wrote in a note.

"Over the past month there appears to have been a growing chorus that the time to talk about tapering bond purchases had been reached."

Among other currencies, New Zealand's dollar held onto declines from last week to trade at US$0.71315, after matching the lowest since mid-April at US$0.71160 on Friday.

In cryptocurrencies, bitcoin traded around US$39,000 after recovering from close to US$31,000 last week.

Rival ether was at around US$2,500, the middle of a narrowing trading range spanning the past month.

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Currency bid prices at 0029 GMT

Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid

Previous Change

Session

Euro/Dollar

US$1.2105 US$1.2109 -0.03per cent -0.92per cent +1.2112 +1.2103

Dollar/Yen

109.7550 109.6600 +0.09per cent +6.26per cent +109.7650 +109.7300

Euro/Yen

132.86 132.79 +0.05per cent +4.68per cent +132.9100 +132.7500

Dollar/Swiss

0.8983 0.8980 +0.05per cent +1.55per cent +0.8983 +0.8978

Sterling/Dollar

1.4114 1.4114 +0.01per cent +3.32per cent +1.4118 +1.4096

Dollar/Canadian

1.2160 1.2170 -0.08per cent -4.51per cent +1.2164 +1.2157

Aussie/Dollar

0.7704 0.7707 -0.04per cent +0.15per cent +0.7710 +0.7701

NZ

Dollar/Dollar 0.7137 0.7128 +0.13per cent -0.61per cent +0.7141 +0.7130

All spots

Tokyo spots

Europe spots

Volatilities

Tokyo Forex market info from BOJ

(Reporting by Kevin Buckland; Editing by Himani Sarkar)