The dollar steadied Tuesday as investors awaited new clues on the path toward higher U.S. interest rates.
The WSJ Dollar Index, which measures the U.S. currency against 16 others, edged down 0.1% to 89.68. The dollar rose 0.2% against the Japanese yen but fell against many emerging-market currencies including the Korean won and Turkish lira.
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The Federal Reserve's latest policy meeting began Tuesday, and most expect the central bank to hold interest rates steady. Though the Fed won't hold a press conference after the meeting, it will release a statement Wednesday afternoon that could acknowledge a string of recent disappointing economic data.
Investors will parse the language for signs that the Fed could raise rates in June. Friday's U.S. employment report, viewed as the best read on the health of the labor market, could also bolster the Fed's case for raising rates next month.
Higher rates would likely support the dollar by making U.S. assets more attractive to yield-seeking investors.
Meanwhile, the dollar could get support as President Donald Trump's pushes forward on his policy proposals.
The dollar soared to a 14-year-high after Mr. Trump's election as investors bet his fiscal stimulus and tax reform proposals would boost the U.S. economy. That trade has stalled since the start of the year, with the dollar falling 3%, as investors doubted the administration will be able to deliver on those proposals.
"The Trump crawl toward a tax plan and fiscal plan is happening," said Brad Bechtel, a currency strategist at Jefferies Group. "There is a lot going for the U.S. dollar right now."
Emerging-market currencies gained as investors sought out riskier assets amid the market calmness. The dollar fell 0.8% against the Turkish lira and 0.7% against both the Brazilian real and South Korean won.
Nick Timiraos contributed to this article.
Write to Chelsey Dulaney at Chelsey.Dulaney@wsj.com
(END) Dow Jones Newswires
May 02, 2017 17:04 ET (21:04 GMT)