Investing.com - The yen and Aussie held weaker on Tuesday in early Asia in a light regional data day with the focus on U.S. monetary policy.
AUD/USD traded at 0.6946, down 0.09%, while USD/JPY changed hands at 118.35, up 0.05%.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, eased 0.25% to 99.35.
Overnight, the dollar held onto losses against the other major currencies on Monday, but the greenback still remained supported as investors awaited the Federal Reserve’s policy meeting this week.
The euro remained under pressure after European Central Bank President Mario Draghi indicated Thursday that the bank could roll out fresh stimulus measures as soon as its next meeting in March. Earlier Monday, data showed that German business climate weakened slightly this month.
The Ifo German business climate index ticked down to 107.3 from December’s 108.6, compared to expectations for a reading of 108.4.
The Fed is expected to keep interest rate on hold at the conclusion of its latest meeting on Wednesday after raising interest rates for the first time in almost a decade in December.
Investors are looking to the Fed policy statement for any indication that the bank is considering slowing the path of interest rate increases this year after recent global financial market turmoil.
Meanwhile, the yen’s gains were limited after Bank of Japan Governor Haruhiko Kuroda said on Friday that the central bank has room to provide additional stimulus if necessary.
The BoJ is to conclude its two day policy meeting on Friday and most analysts are expecting no changes to monetary policy, but recent weakness in economic reports has fueled expectations for more easing later this year.
Separately, data on Monday showed that Japanese exports fell 8% in December from a year earlier. It was the third successive monthly decline as the slowdown in China weighed.