Dollar stalls as dovish Fed tone dials down rate expectations

The dollar remained steady against major peers on Tuesday, after a pause in its rally following a slight dovish shift in Federal Reserve officials’ tone, Reuters reported.

Moves in the Asia session were small as traders waited on further Fed appearances later in the day, Fed minutes on Wednesday and U.S. inflation data on Thursday for more guidance on the trend in interest rates.

The Australian and New Zealand dollars made one-week highs before falling back to flat – leaving the Aussie at $0.6411 and kiwi at $0.6015. Sterling, last at $1.2224 and the euro, at $1.0561, traded broadly steady.

The yen dipped marginally, handing back some of its small gains as violence in the Middle East supported buying of safe-haven assets. It was last about 0.1% lower at 147.7 per dollar. The Swiss franc was steady at 0.9066 to the dollar.

The Israeli shekel was pinned at 3.95 to the dollar, just off an almost eight-year low, after the central bank promised $30 billion in foreign exchange selling.