FOREX-Major currencies on hold as investors keep eagle eye on Fed guidance

* Dollar firm after 3 days of gains ahead of Fed
* Markets expect Fed may lift 2023 rates projections
* Euro may be hampered by delay in vaccine rollouts
* Graphic: World FX rates https://tmsnrt.rs/2RBWI5E

By Hideyuki Sano
TOKYO, March 17 (Reuters) - Major currencies held tight
ranges on Wednesday as investors looked to the U.S. Federal
Reserve's policy meeting for any indications it could start rate
hikes earlier or let bond yields rise further.
The dollar index stood at 91.866 =USD , having risen for
the last three sessions, drawing support mainly from elevated
U.S. bond yields on the back of expectations of a strong
economic recovery.
Fed policymakers are expected to give a nod to such a rosy
view, by forecasting that the U.S. economy will grow in 2021 at
the fastest rate in decades, as the COVID-19 vaccination
campaign gathers pace and a $1.9 trillion relief package washes
through to households. A bigger question for market players is whether the Fed will
signal any inclination to start raising interest rates in 2023,
earlier than it has previously said, in a move that could fuel a
further rally in the dollar.
"The Fed will likely revise up its economic forecast. But
for its median forecast on the Fed funds rate in 2023 to be
raised, four or more members have to raise their projections. So
the market's expectations of earlier rate hikes may not be
validated by the Fed," said Shinichiro Kadota, senior currency
strategist at Barclays.
"But on the other hand, the Fed is likely to sit idle on
rising long-term rates as well. All considered, it is hard to
expect the dollar/yen to weaken after the FOMC, though it could
face more headwinds if it tests new highs."
The dollar stood at 109.01 yen JPY= , not far from Monday's
nine-month high of 109.365.
The euro changed hands at $1.1903 EUR= , having declined
over the last three days, with immediate supports at its 200-day
moving average of $1.1843 and last week's 3 1/2-month low of
$1.18355.
But a possible delay in vaccinations could weigh on the
common currency as Sweden and Latvia joined countries suspending
their use in a further blow to Europe's vaccination rollout.
Europe's medicines watchdog will release results of its
investigation into incidents of bleeding, blood clots and low
platelet counts in recipients of AstraZeneca (NASDAQ:AZN)'s AZN.L
coronavirus vaccine on Thursday afternoon. "Depending on the outcome, it could hurt the euro zone's
business sentiment further and the euro could face fresh selling
pressure on the low vaccination theme," said Daisuke Uno, chief
strategist at Sumitomo Mitsui Bank.
Among major currencies, the U.S. dollar and the British
pound have been bolstered by the faster pace of vaccine rollouts
in the United States and Britain.
Investors were so focused on an economic upturn due to
vaccination that surprisingly weak U.S. economic data published
on Tuesday, including retail sales and industrial out, hardly
dented the mood. The British pound bounced back to $1.3899 GBP=D4 , after
Europe's medicines watchdog said there was no evidence
AstraZeneca's vaccine was unsafe. <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
World FX rates https://tmsnrt.rs/2RBWI5E
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