The dollar hovered near multi-week lows before FED

The U.S. dollar hovered near multi-week lows against major peers on Tuesday. The American currency was weighed by subdued Treasury yields ahead of the Federal Reserve’s policy decision this week. Meanwhile, the yen hardly budged after the Bank of Japan maintained its policy on hold.

The dollar was also out of favor after world stocks started the week, hitting a record high. Additionally, investor confidence increased in a rapid global rebound from the coronavirus pandemic.

Meanwhile, the U.S. dollar index, which measures the U.S. currency against six peers, was slightly changed at 90.947 in the mid-Asian session. Earlier this week, it declined to the lowest since March 3 overnight at 90.679.

The U.S. dollar increased by 0.1% and traded at 108.18 yen. Remarkably, it declined to a seven-week low of 107.48. The yen showed a muted response after the Bank of Japan maintained its monetary policy as anticipated.

the market will be watching Fed Chairman Jerome Powell comments

Moreover, no change to policy is likely to happen when the Federal Open Market Committee ends its two-day meeting on April 28. Still, the market will be watching Fed Chairman Jerome Powell’s comments, who will face questions over whether improving conditions warrant a withdrawal of monetary easing.

The greenback has declined almost 3% since late March as U.S. Treasury yields traded in narrow ranges after falling from a 14-month high of 1.7760%.

Additionally, the benchmark 10-year Treasury yield stood at 1.58% on Tuesday, tracking sideways since declining to a one-month low of 1.528% in the middle of April.

The euro decreased by 0.1% and traded at $1.2071 but remained close to the two-month high of $1.2117 hit Monday. The risk-sensitive Australian dollar declined by 0.15% to $0.7789. The Aussie boosted by 0.7% overnight and traded close to a five-week top.

The offshore Chinese yuan retreated 0.1% after growing to a seven-week peak of 6.4710 per dollar on April 27.

In cryptocurrencies, Bitcoin traded about $53,500 following a 10% increase on Monday, driven by reports that JPMorgan Chase is planning to offer a managed bitcoin fund.