* Fed seen keeping monetary policy stance
* U.S. retail sales fall unexpectedly in February
* Euro falls vs dollar, yen rises
* Aussie and Kiwi dollars slip
* Graphic: World FX rates https://tmsnrt.rs/2RBWI5E
(Adds new comment, FX table, U.S. data, updates prices)
By Gertrude Chavez-Dreyfuss
NEW YORK, March 16 (Reuters) - The dollar was little changed to slightly higher on Tuesday in choppy
trading, with currencies generally lacking direction as market participants awaited the outcome of a Federal
Reserve meeting for clues as to where U.S. interest rates are headed.
The greenback overall posted gains against the euro and commodity currencies such as the Australian and
New Zealand dollars.
At the Fed's two-day monetary policy meeting, policymakers are expected to forecast that the U.S.
economy will grow in 2021 at its fastest rate in decades, with unemployment falling and inflation rising,
but they are unlikely to change their monetary policy. "The Fed will likely maintain its stance because there is clearly no sign of outrageous inflationary
growth and equities seem fine after last week's concern with yields," said Juan Perez, FX strategist and
trader at Tempus Inc in Washington.
"U.S. producer prices, consumer prices, and even retail sales from this morning show that we have a long
way to go before tightening any conditions," he added.
Tuesday's data showed U.S. retail sales dropped by a seasonally adjusted 3.0% last month due in part to
harsh weather in February. Excluding automobiles, gasoline, building materials and food services, retail
sales decreased 3.5% last month after surging by an upwardly revised 8.7% in January. In midmorning trading, the dollar index was up 0.1% at 91.902 =USD . It has gained for a third straight
session.
Investors will also pore over whatever the Fed has to say about the rise in yields, which have gained on
bets that economic growth and inflation could prompt a faster-than-expected normalization of monetary
policy.
"Anything less than a strong message of the Fed being very committed to maintaining favourable financial
market conditions will likely see USD advance further," MUFG FX strategists wrote in a weekly note on
Friday.
U.S. Treasury yields were down overall, with the benchmark 10-year note at 1.589% US10YT=RR .
The euro was down 0.2% at $1.1906 EUR=EBS .
It has held below $1.20 since March 5, hurt by expectations for a slower economic recovery in Europe
compared with the UK and the United States due to problems rolling out coronavirus vaccines.
Germany, France and Italy said on Monday they would suspend AstraZeneca (NASDAQ:AZN) COVID-19 shots after several
countries reported possible serious side effects, but the World Health Organization said there was no proven
link and people should not panic. The Australian dollar - which is seen as a barometer for risk appetite - was down 0.2% at US$0.7742
AUD=D3 . The New Zealand dollar also slipped, down 0.1% at US$0.7191 NZD=D3 .
Britain's pound was little changed at $1.3891 GBP=D3 . Economic growth in the UK will fall by 4% in the
first quarter of 2021 compared with the first quarter of 2020, the governor of the Bank of England said.
The dollar fell 0.3% against the yen to 108.79 JPY=EBS ahead of the Bank of Japan's two-day policy
meeting, which ends on Friday. The central bank's governor said on Tuesday it was important to keep
long-term interest rates "stably low". Currency bid prices at 10:16AM (1416 GMT)
Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid
Previous Change
Session
Dollar index =USD 91.8620 91.8220 +0.06% 2.090% +91.9740 +91.6770
Euro/Dollar EUR=EBS $1.1907 $1.1929 -0.19% -2.55% +$1.1952 +$1.1897
Dollar/Yen JPY=D3 108.8300 109.1200 -0.25% +5.38% +109.2800 +108.8100
Euro/Yen EURJPY= 129.57 130.16 -0.45% +2.09% +130.3900 +129.5000
Dollar/Swiss CHF=EBS 0.9259 0.9275 -0.15% +4.69% +0.9287 +0.9244
Sterling/Dollar GBP=D3 $1.3888 $1.3900 -0.08% +1.66% +$1.3903 +$1.3809
Dollar/Canadian CAD=D3 1.2470 1.2473 -0.02% -2.07% +1.2500 +1.2460
Aussie/Dollar AUD=D3 $0.7743 $0.7756 -0.17% +0.65% +$0.7756 +$0.7711
Euro/Swiss EURCHF= 1.1025 1.1064 -0.35% +2.02% +1.1076 +1.1020
Euro/Sterling EURGBP= 0.8573 0.8582 -0.10% -4.07% +0.8640 +0.8571
NZ NZD=D3 $0.7189 $0.7200 -0.11% +0.15% +$0.7205 +$0.7168
Dollar/Dollar
Dollar/Norway NOK=D3 8.4770 8.4675 +0.20% -1.19% +8.4855 +8.4420
Euro/Norway EURNOK= 10.0940 10.0810 +0.13% -3.56% +10.1158 +10.0747
Dollar/Sweden SEK= 8.5256 8.5125 +0.06% +4.02% +8.5332 +8.4805
Euro/Sweden EURSEK= 10.1525 10.1461 +0.06% +0.76% +10.1733 +10.1300
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World FX rates https://tmsnrt.rs/2RBWI5E
USD https://tmsnrt.rs/3a0DdOD
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