It was a quiet Asian session on Tuesday as investors prefer to be cautious and wait on the sidelines ahead of two important central bank meetings – the Federal Reserve, which announces interest rates on Wednesday, while the Bank of Japan meets on Thursday.
The risk off mood in the currency markets today kept most major pairs in ranges. The dollar/yen pair traded in a very tight range., around the 111 yen level. There was broad dollar weakness since yesterday. Weak US data on Monday did not help the greenback.
A surprise drop in new US home sales data for March supported a view of weak US economic growth, which may keep the Fed from raising interest rates. However, many investors don’t expect a rate hike at this week’s meeting. BUT it would be important to watch the Fed’s statement for any clues of further rate increases.
The euro traded around $1.1268 while sterling held gains at $1.4503 after rallying to $1.4520 on Monday, its highest since mid-February. Lower Brexit risks are helping support the pound, after US President Barack Obama expressed his support for the UK staying in the European Union.
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