• Markets are awaiting word from the Fed, which concludes its two-day meeting later on Wednesday. With the central bank largely expected to hold interest rates steady, the focus will be on language about future increases.
The dollar traded below a six-week high against the yen on Wednesday, as the market awaited the Federal Reserve's policy statement for hints on the U.S. interest rate outlook, while the kiwi rose on the back of higher dairy prices. The dollar last traded at 112.04 yen JPY=, not very far from Tuesday's peak of 112.33 yen, the greenback's strongest level since March 21.
The euro inched up 0.1 percent to $1.0934 EUR=EBS, trading within sight of a 5-1/2 month high of $1.0951 scaled last week.
• The Federal Reserve is expected to signal that it sees the paltry economic growth in the first quarter as a temporary phenomenon that will not get in the way of its plans to raise interest rates. The Fed has forecast two more interest rates hikes for this year, and the market thinks odds are greater than 50 percent that the next hike will come in June.
• Market expectations for a rate hike following this meeting are just 4.8 percent, according to the CME Group's FedWatch tool.
• The United States is negotiating with China on a possible stronger U.N. Security Council response - such as sanctions - to North Korea's repeated ballistic missile launches, which the 15-member body normally condemns in a statement, diplomats said.
• U.S. President Donald Trump and Russian President Vladimir Putin on Tuesday moved to ease the tension from U.S. air strikes in April against Russian ally Syria, expressing a desire for a Syrian ceasefire and safe zones for the civil war's refugees.
The two leaders spoke by phone for the first time since U.S. relations with Russian were strained by the U.S. attack on a Syrian airfield. They two leaders set the foundation for what could be their first face-to-face meeting in July.
• The price of U.S. crude oil continued its tumble Tuesday as investors remain concerned about a global glut and developments in the Middle East that could add to the current supply. West Texas Intermediate (WTI) oil, the U.S. benchmark, fell 76 cents a barrel to $48.08, and is down 5.2% in the last month.
Brent crude oil, the benchmark for international oils, declined 51 cents a barrel to $51.01, its lowest since Nov. 29.
• Signs that Libya is ramping up production may have spooked investors, says Tom Kloza, global head of energy analysis at Oil Price Information Service. There’s “perception that oversupply is still a problem with Libya now able to produce around 750,000 barrels per day of crude,” Kloza says, adding that's 250,000 more than what the country was producing recently.
• However, oil prices sharply extended losses just before Tuesday's settlement, with U.S. crude breaking below $48 a barrel for the first time in more than a month.
• U.S. crude was down $1.35, or 2.8 percent, at $47.49 shortly after 3 p.m. EDT, having struck its lowest level since March 27. Brent fell $1.15, or 2.2 percent, to $50.37.
Reference: Reuters, CNBC, USA Today
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