Dollar steady in Asia before Fed meeting

TOKYO- The dollar held steady in Asia on Tuesday before the US Federal Reserve starts a two-day policy meeting that is expected to see it wind up its six-year-old stimulus programme.

The greenback edged up to 107.84 yen in late morning Tokyo trade from 107.78 yen in New York.

The euro firmed to $1.2713 and 137.12 yen from $1.2699 and 136.86 yen in US trade.

While bank policymakers are widely tipped to bring an end to the Fed’s vast asset-buying programme, traders will be monitoring what they have to say about interest rates.

The Fed has repeatedly said the first rise would come “a considerable time” after the bond-buying stops, but investors want to know how its language will change once it has come to an end.

It had been expected to starting lifting rates early next year but recent turbulence in the global economy — with weakness from Japan to China to Europe — could see it hold off from any movement until much later.

The dollar will likely remain stuck in a tight 107.70-108.10 yen range in Asian trading ahead of the meeting, said Atsushi Hirano, head of forex sales Japan at RBS.

“It may take time (for the market) to get new cues,” he told Dow Jones Newswires.

In Tokyo Bank of Japan Governor Haruhiko Kuroda repeated his view to lawmakers that its plan to hit 2.0 percent inflation was on track and that the weak yen was a “plus” for the world’s number three economy. The BoJ holds a one-day policy meeting Friday.

The euro managed to hold up against the dollar and yen after the European Central Bank said at the weekend that a better-than-expected 90 percent of lenders had passed a stress test on their overall health.

However, the unit’s gains were capped after a closely watched survey of German business confidence fell for a sixth straight month, hitting its lowest level since December 2012.