With traders looking ahead to the Federal Reserve’s monetary policy announcement on Wednesday, the U.S. dollar has experienced choppy trading on Monday.
The U.S. dollar index crept up to a high of 90.60 overnight but is currently trading at 90.51, down 0.05 points or less than a tenth of a percent.
Currently, the dollar is trading at 110.09 yen versus the 109.66 yen it fetched at the close of New York trading on Friday. Against the euro, the dollar is trading at $1.2119 compared to last Friday’s $1.2109.
The Fed is widely expected to leave its monetary policy unchanged, but traders will be looking for any clues the central bank is considering tapering its asset purchases.
Last Thursday’s report from the Labor Department showed consumer price inflation reached the highest level in nearly thirteen years in May, although Fed officials have repeatedly downplayed the risks of prolonged inflation.
Traders will likely pay close attention to any changes to the Fed’s comments about inflation, with previous statements largely attributing rising inflation to “transitory factors.”
Any changes to the Fed’s projections for economic growth, inflation and interest rates are also likely to have a significant impact on the outlook for monetary policy.
A lack of major U.S. economic data has also kept some traders on the sidelines ahead of the release of a slew of data in the coming days.
While the Fed announcement will be in the spotlight, traders are also likely to keep an eye on reports on producer prices, retail sales, industrial production, and housing starts.