* Dollar steady below 6-week high vs yen
* Fed policy decision, statement due later on Wednesday
* Kiwi touches 1-week high after solid NZ jobs data
By Masayuki Kitano
SINGAPORE, May 3 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 strengthened after
strong New Zealand jobs data.
The Federal Reserve is widely expected to keep interest
rates unchanged at the end of its two-day policy meeting on
Wednesday, but investors will look to see whether the central
bank downplays the recent soft patch in the economy to leave the
door open for a rate increase in June.
The dollar last traded at 112.02 yen, still not very
far from a six-week high of 112.33 yen set on Tuesday.
The greenback had pulled away from its six-week high after
weak U.S. April auto sales data released on Tuesday added to
recent worries about the outlook for the U.S. economy, which hit
a soft patch in the first quarter.
Market participants may be wary of actively buying the
dollar against the yen for now, said Satoshi Okagawa, senior
global markets analyst for Sumitomo Mitsui Banking Corporation
"Concerns about geopolitical risks such as North Korea had
weighed on the dollar against the yen recently... But the focus
is shifting to whether the (strength) of U.S. economic
fundamentals is for real," he said.
The greenback has risen against the yen over the past few
weeks as investor risk aversion diminished, helped in part by
reduced concerns over geopolitical tensions.
"There is more data coming up including the jobs data, so
those need to be watched closely," Okagawa said, referring to
the U.S. nonfarm payrolls report due on Friday.
The euro held steady at $1.0930, trading within sight
of a 5-1/2 month high of $1.0951 scaled last week.
The euro saw a relief rally last week, after Emmanuel
Macron's victory against anti-euro nationalist Marine Le Pen in
the first round of France's presidential elections. The runoff
vote is on May 7.
Macron and Le Pen will square off in a televised debate on
Wednesday, ahead of Sunday's runoff vote.
Opinion polls still show Macron, a centrist candidate,
holding a strong lead of 20 points over Le Pen with just four
days to go to the final vote, in what is widely seen as France's
most important election in decades.
The euro will probably head higher, especially against the
yen, if Macron win's Sunday's vote, said Stephen Innes, senior
trader for FX broker OANDA in Singapore.
"Guys just want to see the final outcome and I think they
are going to go into euro and I think primarily euro/yen...
that's going to be their favourite trade," Innes said.
Under that scenario, the dollar is likely to be supported
against the yen as risk sentiment improves, Innes said.
The New Zealand dollar touched a one-week high, after data
showed that New Zealand's jobless rate fell close to eight-year
lows in the first quarter.
The unemployment rate dropped to 4.9 percent, just above an
eight-year low of 4.8 percent hit in the third quarter of 2016.
The New Zealand dollar rose to $0.6969 at one point, its
highest since April 25. The kiwi last stood at $0.6947
, up 0.2 percent from late U.S. trade on Tuesday.
The kiwi's gains also came in the wake of a rise in global
dairy prices at an international auction. The auction results
can affect the New Zealand dollar as the dairy sector generates
more than 7 percent of the country's gross domestic product.
(Reporting by Masayuki Kitano; Editing by Sam Holmes & Simon