FOREX-Dollar heads towards 2-week lows before Fed meeting

* Graphic: World FX rates in 2019 http://tmsnrt.rs/2egbfVh

By Saikat Chatterjee
LONDON, April 29 (Reuters) - The dollar weakened broadly
against its rivals on Wednesday, nearing a two-week low, as
firmer stock markets prompted investors to seek higher yielding
currencies before the outcome of a U.S. Federal Reserve meeting
later in the day.
Against a basket of its rivals =USD , the greenback edged
down 0.3% to 99.60 in early London trading, just above a
two-week low of 99.43 hit in the previous session.
The dollar has weakened more than 3.5% after scaling a more
than three-year peak of 102.99 in late March as global central
banks launched massive stimulus measures to protect economies
from the coronavirus pandemic.
The Australian dollar AUD=D3 led gains against the
greenback with the currency up 0.6% at $0.65433.
"The weakening of the dollar and the strengthening of the
commodity-linked currencies suggest that risk appetite may have
remained supported for another day," said Charalambos Pissouros,
a senior market analyst at JFD Group.
U.S. stock futures ESc1 were up 0.7% while European stocks
were a mixed bag.
"The optimism due to several economies starting to loosen
restrictive measures may have also helped."
The highlight of the day will be the outcome of the U.S.
Federal Reserve meeting where investors will be watching for
clues on future policy after it responded to the economic
devastation of COVID-19 by slashing rates, buying bonds and
backstopping credit markets. "There's no expectation the Fed will change policy," said
Joe Capurso, FX analyst at the Commonwealth Bank of Australia in
February.
Before that, quarterly GDP numbers will be released at 1230
GMT, with consensus forecasts for a contraction of around 4%.
Analysts are already focusing on the extent of recovery in
coming months.
The euro climbed 0.4% to $1.0862 before a European Central
Bank meeting on Thursday.