FOREX-Dollar trades above multi-week lows before Fed meeting

* Fed meeting awaited
* Yen unmoved after BoJ meeting
* Graphic: World FX rates https://tmsnrt.rs/2RBWI5E

By Ritvik Carvalho
LONDON, April 27 (Reuters) - The dollar hovered above
multi-week lows versus major peers on Tuesday, weighed by
subdued Treasury yields ahead of the Federal Reserve's policy
decision this week, while the yen hardly budged after the Bank
of Japan kept its policy on hold.
The safe-haven greenback was largely out of favour after
world stocks started the week hitting a record high, although a
slight pullback in world stock markets on Tuesday helped keep it
above the recent lows.
Trading in currencies was largely subdued, ahead of this
week's Federal Reserve two-day meeting ending on Wednesday,
where no change to policy is expected.

However, the market will pay close attention to comments
from Fed Chairman Jerome Powell, who is likely to face questions
over whether improving conditions warrant a withdrawal of
monetary easing.
Most analysts, though, expect him to say such talk is
premature, which could put downward pressure on Treasury yields
and the dollar.
"By keeping nominal and real U.S. Treasury yields subdued
the Fed is taking away the edge that the dollar would otherwise
have thanks to the superior performance of the U.S. economy,"
said Valentin Marinov, head of G10 FX research at Credit
Agricole.
"This is also allowing investors to focus on
dollar-negatives like President Biden's tax proposals and the
U.S. external imbalances and thus levelling the playing field
between the dollar and other currencies."
The dollar index =USD , which tracks the U.S. currency
against six peers, was flat at 90.889 in the London morning
session, after dipping to the lowest since March 3 overnight at
90.679.
The dollar added 0.2% to 108.34 yen JPY= , another haven
currency, continuing its rise from the seven-week low of 107.48
reached Friday.
The yen showed a muted response after the Bank of Japan kept
its monetary policy on hold as widely expected. "The reflation trade is back on," Gavin Friend, a strategist
at National Australia Bank, said on a client podcast.
"Currencies outside of the dollar should be doing quite well
anyway in that environment."
The dollar has fallen nearly 3% since late March as U.S.
Treasury yields traded in narrow ranges after retreating from a
14-month high of 1.7760%, slashing the currency's yield appeal.
The benchmark 10-year Treasury yield US10YT=RR was around
1.58% on Tuesday, tracking sideways since sliding to a one-month
low of 1.528% in the middle of this month.
The euro slipped 0.1% to $1.2078 EUR= , but remained close
to the two-month high of $1.2117 reached Monday.
The commodity-linked Australian dollar, a barometer of risk
appetite, eased 0.3% to $0.7778 AUD=D3 , after a 0.7% rally
overnight that took it just shy of a five-week peak.
The offshore Chinese yuan retreated 0.1% after rising to a
seven-week top of 6.4710 per dollar CNH=EBS on Monday.
In cryptocurrencies, bitcoin BTC=BTSP hit $55,000
following a 10% surge on Monday, driven by reports that JPMorgan
Chase JPM.N is planning to offer a managed bitcoin fund.
That snapped a five-day losing streak which took the digital
token to the cusp of $47,000, with losses accelerating amid
worries about U.S. President Joe Biden's plan to raise capital
gains taxes.

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World FX rates https://tmsnrt.rs/2RBWI5E
Federal Open Market Committee projections https://tmsnrt.rs/3sQouNv
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