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Dollar slips through ┬е110 in Tokyo

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The dollar eased below ┬е110 in lackluster Tokyo trading Wednesday ahead of U.S. Federal Reserve Chairman Jerome PowellтАЩs news conference and new interest rate projections by U.S. policymakers.

At 5 p.m., the dollar stood at ┬е109.93, down from ┬е110.04 at the same time Tuesday. The euro was at $1.2132, down from $1.2144, and at ┬е133.38, down from ┬е133.61.

The dollar moved mostly in a tight range slightly above ┬е110.00, with many players taking to the sidelines to wait for the news conference to be held after the end of a two-day meeting of the FedтАЩs Federal Open Market Committee later on Wednesday.

The dollar fell past the threshold in late afternoon trading, on the heels of buying of the British pound gaining strength against the greenback following the release of the European countryтАЩs higher-than-expected inflation rate for May.

In addition, some investors are believed to have moved to square dollar-long positions prior to the announcement of the outcome of the FOMC meeting, according to a currency broker.

Especially attracting attention were whether the Fed chief would signal the start of quantitative easing tapering discussions and whether projections for an interest rate hike in 2023 by FOMC members would increase.

Meanwhile, a Japanese bank official downplayed the possible impact of the FedтАЩs policy-setting meeting on the dollar-yen pair, saying, тАЬThe policymakersтАЩ hawkish turn has already been factored in to a certain extent.тАЭ

тАЬBesides, many players have been thinking itтАЩs тАШonly a matter of timeтАЩ before the Fed starts tapering bond purchases,тАЭ the official went on to say.

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