The U.S. dollar floated near multi-week lows against major peers on April 27, weighed by subdued Treasury yields ahead of the Federal Reserve’s policy decision. However, the yen hardly budged after the country’s central bank decided to keep its policy on hold.
The greenback was also out of favor after the world stocks started the week reaching a record high. Stocks benefited from increased investor confidence in a rapid global recovery from the pandemic. The world’s reserve currency does not seem to have the strength it had earlier in the year.
The U.S. dollar index was little changed at 90.947 in the mid-Asian session, after falling to the lowest point since March 3 overnight at 90.679.
Interestingly, the greenback gained 0.1% to 108.18 yen, another haven currency, continuing its rise from the seven-week low of 107.48 reached Friday. The yen showed a muted response after the central bank made the decision to keep its monetary policy on hold.
Dollar and the Federal Open Market Committee
The two-day meeting of the Federal Open Market Committee ends on Wednesday. No change in policy is expected from the committee. Nonetheless, the market will pay close attention to comments from Fed Chairman Jerome Powell, who is likely to face questions. Most analysts expect Jerome Powell to say that it is too early to make important changes.
The dollar fell nearly 3% since late March as U.S. Treasury yields traded in narrow ranges after falling from a 14-month high of 1.7760%.
The benchmark 10-year Treasury yield was around 1.58% on April 27. It declined to a one-month low of 1.528% in the middle of the month.
Another major currency, the euro, dropped 0.1% to $1.2071. Nevertheless, the euro remained close to the two-month high of $1.2117 reached Monday.
The commodity-linked Australian dollar, which is a barometer of risk appetite declined 0.15% to $0.7789. It fell after a 0.7% rally overnight that took it just shy of a five-week peak.
The offshore Chinese yuan fell 0.1% after rising to a seven-week top of 6.4710 per dollar on April 26.
In cryptocurrencies, bitcoin traded around $53,000 after a 10% surge on Monday. The reports that JPMorgan Chase is planning to offer a managed bitcoin fund helped to boost the price of bitcoin. That factor helped to break a five-day losing streak that took the world’s largest cryptocurrency to the cusp of $47,000.
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