The dollar weakened against the euro and a host of resource-linked currencies Wednesday as investors waited to scrutinize an updated policy statement from the Federal Reserve.
The overall market mood was “tentative” as oil prices consolidated above $30 a barrel while moves in both global equities and Treasurys were muted, market strategists from Scotiabank noted.
One dollar bought ¥118.42, compared with ¥118.43 late Tuesday in New York. The euro was at $1.0897, up from $1.0864 Tuesday.
The ICE U.S. Dollar index , a measure of the dollar’s strength against a basket of six currencies, was down 0.6% at 98.7860.
The relaxed trading environment has helped investors regain their appetite for risk, which is draining support from the dollar, analysts said.
Meanwhile, investors were hesitant to buy yen ahead of the Bank of Japan meeting later this week, said Josh O’Byrne, a G-10 currency strategist at Citigroup.
“Cross-yen investors are feeling better about risk. People are aware of BOJ this week so they’re less inclined to be buyers of yen,” O’Byrne said.
The Canadian and Australian dollars , as well as the Mexican peso , were all outperforming the dollar as hope for an oil rebound rises.