The US dollar is vital ahead of today’s FOMC meeting, where no policy change is expected, but forward guidance will be closely watched. Japanese markets were closed for a holiday, but the dollar’s gains against the yen have continued, nearing a two-year peak around JPY152. While the dollar is generally up against other G10 currencies, emerging market currencies are mostly lower.

The market digests the Bank of Japan’s recent move in Asia Pacific, though no further tightening is expected due to the country’s weak economy. China left its loan prime rates unchanged, with property sales declining.

In Europe, the UK reported lower-than-expected consumer and producer price indices, with favorable base effects driving declines in year-over-year rates. Norway’s January growth exceeded expectations, while Switzerland may see a rate cut amid sluggish economic indicators.

The euro and sterling face challenges, with the euro near its lowest level since March 1 and sterling showing signs of recovery but lacking follow-through buying. Tomorrow’s Bank of England meeting may reveal a wider dispersion of views.

Fed Day in the Americas focuses on the FOMC statement, Summary of Economic Projections, and Fed Chair Powell’s press conference. Softer Canadian inflation data weighed on the loonie, while the US dollar surged against the Mexican peso. Banxico meets tomorrow with expectations for a quarter-point cut.

Overall, the US dollar remains strong across various currencies amid anticipation of the global FOMC meeting outcomes and other economic developments.

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