By Daniel Leussink
TOKYO (Reuters) – The dollar rose against most of its peers on Wednesday, as reports of renewed tensions in the US-China trade negotiations supported the security harbor bid, even though the Federal Reserve's political meeting later today restricted greenback profits.
Against a basket of important rival currencies, the dollar was nearly 0.1 percent higher at 96,454, as it managed to find its foot after meeting its lowest level since March 1 at 96,291 in overnight trading.
The index is still down 1.3 percent from a three-month high 97.71 hit on March 7. On comments, the Fed will strike a dovish note during its latest policy meeting.
The Australian dollar slipped quarter-in-percent to $ 0.7070 on a decline in 10-year bond yields and after Bloomberg reported that some US officials expressed concern that China is pushing back against US trade negotiation requirements.
"What has been priced by global markets is the idea that we will see a negative solution to the trade negotiations," said Chris Weston, research director at the Pepperstone foreign exchange market in Melbourne.
"The last thing we need to see now is an increase in tensions suggesting that there is an increased likelihood that the US will put its fees on the $ 200 billion in 25 percent," he added.
US Trade Representative Robert Lighthizer and Finance Minister Steven Mnuchin are expected to travel to China next week for another round of trade talks with Chinese counterparts.
Yukio Ishizuki, senior currency strategist at Daiwa Securities, said he did not believe that market participants expected a quick solution to Chinese-American trading venue sometime soon.
"At the moment, the market continues to react to the headlines as they come and go," he said.
Investors' immediate focus was on the Fed to see if the central bank would confirm its commitment to "patient" monetary policy and to clues to the likely path for US borrowing.
The Fed is due to make its price announcement at 1800 GMT on Wednesday and is expected to keep its benchmark overnight rate unchanged.
Most currencies remain in in-depth trading areas before the Fed decision, since market participants were cautious after taking clues from US data that offer new signs is the world's tallest economy on the road with slower growth.
New orders for US goods rose less than expected in January and deliveries fell for a fourth straight month, providing more evidence of a slowdown in US manufacturing operations, data show overnight.
More positive signs were shown in Germany as a study by the ZEW research institute showed that the mood of German investors improved more than expected in March, as any delay to Britain's exit from the European Union helped lift emotions.
On Wednesday, both the euro and the Japanese yen were down against the dollar. The common currency was a shade lower of $ 1.11347.
The yen yielded about one sixth of one percent to 111.60 yen per dollar. Greenback got some help from Japanese importers on a "gotobi" date – a multiple of five – on which accounts are traditionally settled.
Sterling was a shade lower of $ 1,3259. It had mated gains overnight worried that British Prime Minister Theresa Mays request for delaying Brexit went into complications with the European Union.
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